NEW YORK, April 24, 2021 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Lordstown Motors Corp. (“Lordstown” or the “Company”) (formerly known as DiamondPeak Holdings Corp. (“DiamondPeak”)) (NASDAQ: RIDE; RIDEW; DPHC) and certain of its officers. The class action, filed in the United States District Court for the Northern District of Ohio, Eastern Division, and docketed under 21-cv-00760, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Lordstown securities between August 3, 2020 and March 17, 2021, inclusive (the “Class Period”). This action is brought on behalf of the Class for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a) and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
If you are a shareholder who purchased Lordstown securities during the Class Period, you have until June 8, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
According to its website, Lordstown is an automotive company founded for the purpose of developing and manufacturing light duty electric trucks targeted for sale to fleet customers. The Company’s purported flagship vehicle is the “Endurance,” an electric full-size pickup truck.
On August 3, 2020, Lordstown and DiamondPeak announced that they had entered into a definitive merger agreement through which, upon closing, the combined company would remain listed on the NASDAQ stock exchange under the new ticker symbol “RIDE.” DiamondPeak was set up as a special purpose acquisition company (also known as a SPAC). DiamondPeak’s shares traded on the NASDAQ stock exchange under the ticker symbol “DPHC.” The August 3, 2020 release provided, in relevant part, that the transaction valued Lordstown “at an implied $1.6 billion pro forma equity value,” and that the transaction was expected to deliver approximately $675 million in gross proceeds. The release announced that the transaction was expected to close in the fourth quarter of 2020.
On October 22, 2020, Lordstown and DiamondPeak announced that DiamondPeak shareholders had approved the merger. On October 23, 2020, Lordstown announced that it had completed the business combination with DiamondPeak, and that beginning on October 26, 2020, Lordstown’s Class A shares would begin trading on the NASDAQ Global Select market under the ticker symbol “RIDE,” and that its warrants would trade on NASDAQ under the symbol “RIDEW.”
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company’s purported pre-orders were non-binding; (ii) many of the would-be customers who made these purported pre-orders lacked the means to make such purchases and/or would not have credible demand for Lordstown’s Endurance; (iii) Lordstown is not and has not been “on track” to commence production of the Endurance in September 2021; (iv) the first test run of the Endurance led to the vehicle bursting into flames within 10 minutes; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
Before the markets opened on March 12, 2021, analyst Hindenburg Research published a scathing report on Lordstown entitled: “The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, and a Prototype Inferno.” As alleged in greater detail below, in this report, Hindenburg noted that Lordstown has “no revenue and no sellable product,” and wrote that the Company “has misled investors on both its demand and production capabilities.” The Hindenburg report concluded that Lordstown’s “orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” and that a former employee “explained how the company is experiencing delays and making ‘drastic’ design modifications, putting [Lordstown] an estimated 3-4 years away from production,” rather than the Company being “on track” for a September 2021 production start.
On this news, the price of Lordstown common stock fell approximately 16.5% in one day, down from its March 11, 2021 closing price of $17.71 to a March 12, 2021 close of just $14.78. This represents hundreds of millions of dollars in lost market capitalization.
Then on March 17, 2021, after trading had closed, the Company held an earnings call on which Defendant Burns disclosed that Lordstown had received an inquiry from the SEC. Remarkably, although Lordstown also issued a press release and a Form 8-K announcing its fourth quarter and full year 2020 financial results after trading closed on March 17, 2021, the Company failed to disclose the existence of the SEC inquiry in those filings.1 On this news, the stock fell approximately another 9% in aftermarket trading.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980