Dogs of Lordstown – TechCrunch

There’s extra to this story than one dangerous quarter

The lackluster efficiency of shares in firms which have mixed with particular goal acquisition firms (SPACs) in latest quarters took one other hit yesterday when Lordstown Motors reported its first-quarter outcomes.

Lordstown, a part of a wave of electric-vehicle firms that raised capital and went public through SPACs, introduced lower-than-expected 2021 automobile manufacturing, larger capital expenditures (capex) for the 12 months, and the necessity to increase extra capital. For holders of its fairness, the information was a disappointment, as TechCrunch explored after the outcomes dropped.


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Shares of Lordstown are down 14% in pre-market buying and selling after falling in after-hours buying and selling yesterday night.

However there’s extra to the Lordstown mess than merely a single dangerous quarter. What the corporate reported is considerably contradicted by its SPAC deck, a doc that each startup combining with a blank-check firm releases. They’re usually cheery and full of excellent information. With just a bit capital, the corporate in query goes to scale quickly within the coming years, with bettering profitability as well.

Then the deal is offered, capital is raised, entities mix, and the startup in query turns into public, with earnings calls commencing on a quarterly cadence. That’s the place the rubber meets the highway.

Lordstown’s earnings mess and the ensuing dissonance with its personal predictions are notable on their very own, however additionally they level to what could possibly be shifting sentiment regarding SPAC combinations. Returns are lackluster, the SEC is worried about too-rosy forecasts and Congress is looking into the boom.

We’re looking into Lordstown’s outcomes this morning, however don’t suppose that we’re solely singling out one firm; others match the invoice, and extra will in time.

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