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Lordstown Motors, an electric truck startup, may go out of business

The news sent Lordstown shares down nearly 8 percent in after-hours trading. Not only affects the company. For 53 years, Lordstown, Ohio, was home to the massive General Motors plant, which GM closed in 2019.
The company sells a 6.2 million square foot factory, twice the size of the Pentagon. To start Lordstown Motors later that year, which promises to pay workers union-level wages to build the Endurance pickup truck, production is slated to begin production of that truck in September.

But Tuesday the startup said it no longer had enough money to start commercial production. By warning that now “There are serious doubts”

; about the ability to continue the business over the next 12 months.

The filing company stated that It had $259.7 million in cash on hand as of March 31, after a net loss of $125.2 million over the previous three months.

The company said its ability to continue running the business. “It depends on the ability to develop electric cars. Regulatory approval Start commercial production and launching the sale of such vehicles” is seeking additional funding.

The company declined to comment beyond a statement in the filing, saying it was still focused on starting production in late September.

Lordstown Motors faces stiff competition as the more well-known automaker has announced plans for its own electric pickup truck.

Ford (F) Launched the electric version of the F-150, a petrol version that has been the country’s best-selling pickup truck for more than 40 years Tesla (TSLA)The largest electric car maker has announced plans for the Cybertruck, which will begin production later this year.
Lordstown Motors factory, where GM used to operate, Lordstown Motors warned Tuesday it may not have the cash needed to start production of the first cars.  That's an electric pickup.

Doubts about the company’s survival were raised ahead of Tuesday’s filing. In March, Hindenburg Research, a company that bets its share price will fall. Questioned the validity of the contract Lordstown Motors told investors the company had in hand. It also said Endurance was under fire in its first test. Lordstown shares have lost 37 percent since the Hindenburg report through Tuesday’s close.

Lordstown Revival: Electric Pickup Startup Brings Old GM Factory Back

Lordstown confirmed the fire. which was caused by human error while building the prototype model. But it rejected Hindenburg’s question about the sale contract and insisted it had done nothing wrong. However, the company also revealed on Tuesday that it had received two subpoenas from the Securities and Exchange Commission. which is investigating pre-orders for the company’s trucks. It said it was cooperating with the investigation.

Tuesday’s filing is an update to the 2020 results filed earlier this year.

The language of filing doubts about its ability to conduct business is something that brokerage firms have difficulty warning investors about. That doesn’t mean an exact closure. Sears Holdings used this language in a similar filing in March 2017 that eventually filed for bankruptcy and is still in business today. Although only a fraction of the shops are still open.

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