RIDE - Lordstown Motors stock plunges 52% after bankruptcy filing Foxconn lawsuit
2023-06-27 05:24:35 ET
Lordstown Motors ( NASDAQ: RIDE ) has filed for Chapter 11 bankruptcy , sending its stock ~52% lower before the bell, and sued Taiwanese electronics contract manufacturer Foxconn ( OTCPK:FXCOF ) for allegedly reneging on its commitments to the electric vehicle maker.
The automaker stressed that it is debt-free and continues to operate with significant cash on hand.
As part of the Chapter 11 restructuring, Lordstown ( RIDE ) has begun a sale process for its Endurance truck and related assets. It expects the restructuring will speed up the timeline for hearing its litigation against Foxconn ( OTCPK:FXCOF ).
"The litigation details Foxconn's ( OTCPK:FXCOF ) fraud and willful consistent failure to live up to its commercial and financial commitments to the company," Lordstown ( RIDE ) said in a statement. "Foxconn's actions led to material damage to the company as well as its future prospects."
The lawsuit pertains to a partnership with Foxconn ( OTCPK:FXCOF ), under which Lordstown ( RIDE ) agreed to divest its Ohio manufacturing facility to the Taiwanese firm and form a joint vehicle development platform.
Lordstown ( RIDE ) had paused production of Endurance earlier this year. It later resumed production at a lower rate.
Shares of the EV maker have declined 84% YTD. Last month, Lordstown ( RIDE ) plunged to an all time low after it issued a going concern warning.
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Lordstown Motors stock plunges 52% after bankruptcy filing, Foxconn lawsuit