RIDE - Lordstown Motors fires off reverse stock split

2023-05-23 07:39:36 ET

Lordstown Motors Corp. ( NASDAQ: RIDE ) announced on Tuesday that it will effect a 1-for-15 reverse stock split.

Lordstown Motors’ ( RIDE ) Class A common stock will begin trading on a split-adjusted basis on the Nasdaq Global Select Market  under its existing symbol when the market opens on May 24.

The reverse stock split was approved by the company’s stockholders at the annual meeting held on May 22 with the final ratio determined by the board of directors. The company has filed an amendment to its second amended and restated certificate of incorporation to effect the reverse stock split as of the effective time. Outstanding equity-based awards and other outstanding equity rights will be proportionately adjusted at the time of the reverse split. No fractional shares will be issued in connection with the split.

Lordstown Motors ( RIDE ) said the reverse stock split is intended to improve the marketability and liquidity of the Class A common stock.

"A higher market price can make the Class A common stock more attractive to a broader range of institutional investors, professional investors, and other members of the investing public. In addition, the Reverse Stock Split is intended to increase the per share market price of the Class A common stock in order to satisfy Nasdaq’s $1.00 minimum bid price requirement."

As previously disclosed, Lordstown Motors ( RIDE ) and Foxconn have a dispute concerning whether the April 21,  letter the company received from Nasdaq regarding the Bid Price Requirement caused a failure of a condition to closing Foxconn’s purchase of approximately 10% of RIDE's common stock for $47.3M. RIDE believes that there was no failure of any closing condition, and the company was ready, willing and able to close that transaction on May 8.

In a production update, Lordstown Motors ( RIDE ) noted it has completed 56 Endurance vehicles and delivered 18 to customers, 12 since resuming deliveries in late April.

Shares of Lordstown Motors ( RIDE ) fell 9% to $0.27 in premarket action on Tuesday.

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