Lordstown Motors CEO Steve Burns and CFO Julio Rodriguez have resigned from the startup automaker following last week's announcement that it may not have enough cash to begin production of its all-electric pickup truck this fall.
The company's Lead Independent Director Angela Strand has been appointed Executive Chair and will oversee the company until a new CEO is found. Becky Roof has been named interim CFO.
The stock was down sharply in pre-market trading on the news Monday adding to the 43% drop already this year.
Burns, who founded the company and remains its largest shareholder, also resigned from its board of directors.
"Lordstown Motors has achieved significant milestones on the path to developing the first and best full-size all-electric pickup truck, the Lordstown Endurance. We thank Steve Burns for his passion and commitment to the company," Lordstown said in a statement on the executive changes.
"As we transition to the commercial stage of our business – with planned commencement of limited production in late-September – we have to put in place a seasoned management team with deep experience leading and operating publicly-listed OEM companies. We have complete confidence in Angela and Becky, and our expanded leadership team, to effectively guide the company during this interim period."
Lordstown last Tuesday filed a going-concern notice with the SEC and later announced plans to raise additional capital through an equity sale, which sent the stock higher on Friday. The Ohio-based company is aiming to bring the first mass-produced full-size electric pickup to market this September ahead of the upcoming launches of the Tesla Cybertruck and Ford F-150 Lightning.
|F||FORD MOTOR CO.||13.82||-0.09||-0.65%|
"Given that Lordstown is going to need to raise a bunch more capital, I expect that was going to be extremely challenging as long as Burns and Rodriguez were still around," Guidehouse Insights Principal Analyst Sam Abuelsamid told FOX Business.
"I expect that following the release of the F-150 Lightning most of the confidence in Lordstown's ability to succeed and turn any interest in the Endurance into real business with the current leadership has evaporated. They absolutely needed to pivot to have any hope of raising money."
A special committee formed by the company refuted many of the claims made by Hindenburg Research, including the viability of its technology, but admitted it "made periodic disclosures regarding pre-orders which were, in certain respects, inaccurate."
Among them were statements that indicated reservations for its Endurance pickup were coming "primarily" from commercial fleets when they were in fact being made by fleet management companies and brokers to third-party fleets.
The committee also determined that one entity placed a large order that it didn't appear to have the resources to support while several other commitments "appear too vague or infirm to be appropriately included in the total number of pre-orders disclosed."