Facing significant economic pressures and to avoid a potential Nasdaq delisting, electric vehicle manufacturer Lordstown Motors Corp RIDE announced Tuesday it will execute a 1:15 reverse stock split on May 24. The decision was greenlit by the stockholders Monday in an annual meeting.
The company’s reverse split is a strategic gambit aimed at complying with Nasdaq listing standards while also courting the favor of Foxconn Technology Co Ltd FXCOF, an investor that recently hinted at the possibility of withdrawing a critical $170-million funding lifeline for the beleaguered EV manufacturer, according to Reuters.
Lordstown reiterated its commitment to close the Foxconn deal in a Tuesday press release, but noted there was no assurance that it will close.
Lordstown said Tuesday that since initiating commercial production, it has manufactured 56 units of its EV model, the Endurance, and has delivered 18 of these to customers, including 12 since late April.
As of April 30, the company said it had roughly $165 million in cash, cash equivalents, and short-term investments, marking a decrease of about $11 million from the quarter that ended March 31.
If the company were to enact the split right now, with shares trading at 29 cents, one share would be worth $4.35.
RIDE Price Action: Shares of Lordstown Motors are trading 4.3% lower to 29 cents, according to data from Benzinga Pro.
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