September 24, 2021

Biz Journal

Business perfection

Early Lordstown Motors Investor Workhorse Group Offered Most of Stake in Startup

Electrical supply truck maker

Workhorse Group Inc.


WKHS 2.97%

mentioned Monday it bought down a lot of its stake in

Lordstown Motor Corp.


RIDE 2.11%

this summer time, lowering its fairness place within the embattled Ohio-based startup.

Workhorse, in an organization submitting, mentioned it had bought 11.9 million shares in

Lordstown Motors

since July 1, lowering its 9% stake by almost three-quarters. Workhorse, additionally based mostly in Ohio, was an early investor in Lordstown Motors, which was established in 2019 by Workhorse founder and former chief govt

Steve Burns,

an entrepreneur who had beforehand begun tech and advertising and marketing corporations.

The divestiture comes forward of Lordstown Motors’ deliberate electric-truck launch in September. The startup is cash-strapped and making an attempt to lift extra capital to make sure its survival.

Beginning manufacturing of Lordstrown Motors’ debut pickup truck, the Endurance, is a vital goal for the startup, which went public final fall via a reverse merger with a special-purpose acquisition firm, or SPAC.

In current months, the corporate has been rocked by quite a few challenges, together with federal investigations into its enterprise practices, and the exit of Mr. Burns.

Workhorse mentioned it netted $79 million from promoting down its Lordstown Motors shares. Lordstown Motors inventory was buying and selling at $5.77 a share Monday morning, down 2.7% after Workhorse reported it decreased its stake.

Lordstown Motors didn’t instantly reply to a request for remark.

Lucid, Fisker, Rivian and Canoo are among the many well-funded startups racing to launch new electrical automobiles. WSJ requested CEOs and trade insiders how new auto corporations plan to problem Tesla’s market dominance and tackle legacy automobile makers. Photograph composite: George Downs

Workhorse, established in 2007, develops and sells electric-powered supply vehicles and vans for package-delivery corporations and utilities. It went public in 2010 via an providing on the over-the-counter market.

Workhorse’s ties to Lordstown Motors transcend it holding an fairness stake; a number of former Workhorse executives had adopted Mr. Burns to Lordstown Motors after he began the electric-truck agency.

Lordstown Motors Govt Chairwoman

Angela Strand,

who’s overseeing the corporate following Mr. Burns’s departure in June, had served as a vice chairman at Workhorse till 2018. Others who joined Mr. Burns from Workhorse have since left, together with Lordstown Motors’ former chief monetary officer and chief working officer, and his daughter,

Brittney Burns,

who had been the corporate’s advertising and marketing director.

Write to Ben Foldy at [email protected]

Copyright ©2021 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link