Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Lordstown Motors Corp.
NEW YORK–(BUSINESS WIRE)–#Lordstowncase—Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-lordstown-motors-corp-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of the common stock of Lordstown Motors Corp. (NASDAQ:RIDE), formerly known as DiamondPeak Holdings Corp. (NASDAQ:DPHC), and the common stock warrants of Lordstown Motors Corp. (NASDAQ:RIDEW) and of DiamondPeak Holdings Corp. (NASDAQ:DPHCW and NASDAQ:DPHCU), between August 3, 2020 and March 24, 2021, and all holders of DiamondPeak Holdings Corp. common stock entitled to participate in the August 22, 2020 shareholder vote on the merger with Lordstown Motors (the “Class”). This action was filed in the Northern District of Ohio and is captioned Zuod v. Lordstown Motors Corp., No. 21-cv-00720.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Lordstown Motors common stock during the Class Period to seek appointment as lead plaintiff in the Lordstown Motors class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Lordstown Motors class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Lordstown Motors class action lawsuit. An investor’s ability to share in any potential future recovery of the Lordstown Motors class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Lordstown Motors class action lawsuit, you must move the Court no later than 60 days from March 18, 2021. If you wish to discuss the Lordstown Motors class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Mary K. Blasy of Robbins Geller, at 800/449-4900 or 631-454-7719 or via e-mail at [email protected]. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-lordstown-motors-corp-class-action-lawsuit.html.
The Lordstown Motors class action lawsuit charges Lordstown Motors and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
According to the complaint, Lordstown Motors is an automotive company founded for the purpose of developing and manufacturing light duty electric trucks targeted for sale to fleet customers. Lordstown Motors’ purported flagship vehicle is the “Endurance,” an electric full-size pickup truck. Until November 2020, Lordstown Motors shares were privately held. DiamondPeak was a publicly traded special purpose acquisition company (also known as a SPAC), which was formed and taken public to raise funds to purchase one or more other businesses. On August 3, 2020, Lordstown Motors and DiamondPeak announced that they had entered into a definitive agreement to merge, after which the combined company would remain listed on the NASDAQ stock exchange under the new ticker symbols “RIDE” and “RIDEW.”
The Lordstown Motors class action lawsuit alleges that, throughout the Class Period, while defendants touted the 100,000 “pre-orders” that Lordstown Motors had obtained for purportedly large “fleet” sales of Endurance trucks, defendants made false and/or misleading statements and/or failed to disclose that: (i) Lordstown Motors had been paying consultants to drum up nefarious pre-order customers; (ii) many of the would-be customers who made these purported pre-orders were either bogus entities or lacked the means to make such purchases and thus would not have credible demand for Lordstown Motors’ Endurance; (iii) Lordstown Motors 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, Lordstown Motors’ public statements were materially false and misleading at all relevant times.
On March 12, 2021, stock research firm Hindenburg Research published a research report accusing Lordstown Motors of touting what were “largely fictitious” orders. According to Hindenburg Research, in reality: (i) many of the purported pre-order customers were mere sham operations; (ii) Lordstown Motors had paid consultants to solicit pre-orders from entities that were either unable and/or unwilling to ever make any actual purchases; (iii) Lordstown Motors was not on track to begin final production by September 2021 and instead may take years to begin actual production; (iv) Lordstown Motors’ Chief Executive Officer (“CEO”) had been terminated from his prior employment with the company that purportedly developed Lordstown Motors’ EV truck technology for misconduct and failed management; and (v) as a result of the foregoing, Lordstown Motors’ positive statements during the Class Period about the company’s business metrics and financial prospects were false and misleading and/or lacked a reasonable basis.
In response to this news, the price of Lordstown Motors Class A common stock declined by approximately $3.00 per share on March 12, 2021, on unusually high trading volume of more than 7x the average volume over the preceding 10 trading days.
Then, during a conference call held on the evening of March 17, 2021, after the close of trading, Lordstown Motors disclosed that the company had received a request for information from the SEC. When interviewed by CNBC on the morning of March 18, 2021, the Lordstown Motors CEO now claimed that the company had “never said we had orders,” and admitted that the company “[didn’t] have a product yet,” adding that “[b]y definition we can’t have orders.” He further stated that the previously much hyped “preorders did exactly what they were supposed to do. Gauge interest. Nobody knew if fleets would buy an electric pickup truck. It was completely unknown science, no data around it.” He concluded, stating: “I don’t think anybody thought we had actual orders. That’s just not the nature of this business.” On this news the market price of the Class A common stock declined further, closing down more than $2.00 per share, again trading on unusually high trading volume.
Finally, on March 24, 2020, during the trading day, Hindenburg Research published additional pictures of the Endurance EV truck after it broke down and had to be loaded onto a tow truck during the filming of a commercial that had been aired just days prior to the common stock of Lordstown Motors being taken public via its combination with DiamondPeak. On this news the stock price fell another $1.21 per share, once again trading down on unusually high trading volume.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For eight consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.
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Contacts
Robbins Geller Rudman & Dowd LLP
Mary K. Blasy, 800-449-4900
[email protected]
