RIDE - Wall Street Breakfast Podcast: Lordstown Motors Plunges On Bankruptcy Filing

2023-06-27 06:32:27 ET

Summary

• Lordstown Motors files for Chapter 11 bankruptcy, with its stock plunging over 58% premarket; the company is also suing Foxconn for alleged breach of commitments.
• Jackson Financial reveals that at least 700,000 customers were exposed in a data breach linked to Progress Software's MOVEit; the company is offering credit monitoring and identity theft services.
• The EU's antitrust regulator is investigating whether Amazon may favor iRobot vacuum cleaners over rival brands in its probe of the planned acquisition of iRobot.

Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify Lordstown Motors ( RIDE ) plunges after bankruptcy filing, Foxconn lawsuit . (00:28) Jackson Financial ( JXN ) says up to 800K customers hit by MOVEit breach (01:30). EU looking at self-preferencing in its probe of Amazon's ( AMZN ) iRobot (IRB) takeover - report (02:41).

This is an abridged transcript of the podcast.

Lordstown Motors files for Chapter 11 bankruptcy. Jackson Financial releases information about a data breach and the EU’s antitrust regulator is looking into the Amazon iRobot deal.

Lordstown Motors (NASDAQ: RIDE ) has filed for Chapter 11 bankruptcy .

Premarket RIDE is down more than 58%.

Lordstown has also sued Taiwanese electronics contract manufacturer Foxconn ( OTCPK:FXCOF ) for allegedly reneging on its commitments.

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 ).

Lordstown ( RIDE ) said in a statement, "The litigation details Foxconn's ( OTCPK:FXCOF ) fraud and willful failure to live up to its commercial and financial commitments to the company." It goes on to say that, "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 Foxconn and form a joint vehicle development platform.

Jackson Financial (NYSE: JXN ) said at least 700K of its customers were exposed in a data breach.

This information comes from an SEC filing dated Monday.

The company's National Life Insurance Company determined that information at one of its third-party vendors, Pension Benefit Information, was impacted by Progress Software's MOVEit data breach.

The filing says the information obtained is “personally identifiable” and that they would be notifying those affected by the breach as soon as “reasonably possible.” Jackson also said it would offer credit monitoring and identity theft services.

The company is still investigating the incident and sees no material adverse effect on the business, operations or financial results, it said.

In addition, Jackson ( JXN ) said that it experienced unauthorized access to two servers "the scope and nature of the data accessed on those servers was significantly less than the PBI impact."

Last week another company Genworth Financial ( GNW ) disclosed that personal information of 2.5M-2.7M customers , including social security numbers, was exposed in the MOVEit breach.

Europe's antitrust regulator is said to be evaluating whether Amazon (NASDAQ: AMZN ) may favor iRobot (NASDAQ: IRBT ) robot vacuum cleaners over rival brands in its probe of the planned acquisition of iRobot.

This according to a CTFN report from Friday, which cited a person familiar with the matter.

The regulator is not looking at privacy issues as a potential area of concern. Amazon ( AMZN ) has until Thursday to submit remedies to try to allay any worries.

The EC is scheduled to finish its initial review of the deal on July 6. News of a potential in-depth EC probe into the deal surprised some investors after the UK's antitrust regulator approved the transaction earlier this month.

Other headlines to look out for on Seeking Alpha:

China's premier says economic growth on track to reach 5% target, to be higher in Q2

DeSantis seeks to dismiss Disney lawsuit, claims immunity

Lilly says patients saw mean weight reduction of 58 lbs on retatrutide

Illumina announces job cuts, to exit San Diego i3 campus

Baidu says Ernie Bot AI model beats ChatGPT on several measures

On our catalyst watch for the day, Delta Airlines ( DAL ) will webcast the company's Investor Day presentation. Shares of Delta rallied more than 3% the last time the carrier held a similar event. In general, Delta's guidance updates have had the biggest share price impact across the sector of any of the major carriers.

U.S. stocks on Monday ended in the red.

The Nasdaq retreated 1.16%. The S&P 500 ( SP500 ) slipped 0.45% and the Dow ( DJI ) seesawed through the day and finally settled 0.04% lower.

Of the 11 S&P sectors, five ended trading in the red, led by Communication Services. Energy and Real Estate topped the gainers.

Treasury yields slipped. The longer-end 10-year yield ( US10Y ) was down 3 basis points to 3.71% while the 2-year yield ( US2Y ) was down 2 basis points to 4.73%. The yield curve inversion between the two pushed beyond 100 basis points .

The economic calendar was light, with only the Dallas Fed Manufacturing Survey on the docket. The data showed that general business activity and business outlook in Texas manufacturing improved, though remains in negative territory.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is down 0.03%, the S&P 500 is up 0.2% and the Nasdaq is up 0.5%. Crude oil is down 1.5% at less than $69 a barrel. Bitcoin is up 0.4% and is still above 30,000.

In the world markets, the FTSE 100 is up 0.07% and the DAX is down 0.08%.

On today’s economic calendar, at 10am new home sales and also at 10am consumer confidence.

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