Lordstown Motors’ Top Executives Resign After Board Investigation

G.M. declined on Monday to comment on Lordstown’s announcement of the resignations, as did Goldman Sachs, which helped arrange the company’s merger with DiamondPeak.

Other electric vehicle companies that have completed or proposed SPAC deals have also had trouble living up to their big promises and had to replace their top executives.

Trevor Milton stepped down as executive chairman of the electric truck company Nikola shortly after Hindenburg issued a report accusing him of making numerous false assertions about the company’s technology. Nikola has rebutted some of Hindenburg’s claims but has acknowledged that some of its past statements were false.

And in April, Ulrich Kranz, the chief executive of Canoo, which is developing an electric vans, pickup trucks and other vehicles, resigned. Canoo, which completed its SPAC merger in December, said last month that the S.E.C. had opened an inquiry into various aspects of its business.

Companies merging with SPACs often issue rosy financial forecasts, a practice that is restricted in conventional initial public offerings. The S.E.C. is now scrutinizing such promises more closely. SPAC deals also come together much more quickly than I.P.O.s and executives do not typically have to participate in a road show to pitch their stock to investors. That is partly why companies that have merged with SPACs have become targets for short sellers, who make money by betting that a stock is overvalued and its price is poised to drop.

Lordstown said that it had appointed its lead independent director, Angela Strand, executive chairwoman while it looks for a permanent chief executive. Becky Roof will serve as interim chief financial officer.

One of the members of the board committee that ordered the law firm’s report was David T. Hamamoto, a sponsor of the Diamond Peak SPAC.

Article source: https://www.nytimes.com/2021/06/14/business/lordstown-motors-steve-burns-julio-rodriguez.html