Nasdaq
Lordstown Motors stock bounced back yesterday after Chairperson Angela Strand insisted the troubled EV maker can RIDE out the storm.
Lordstown motors (RIDE:NASDAQ)+$1.04 (+11.34%)
It’s been a tough week for investors in struggling electric vehicle maker Lordstown Motors. On Monday, CEO Steve Burns and CFO Julio Rodriguez resigned after the company reported order book irregularities. However, the newly-appointed Strand tried to quell investors’ fears with her upbeat assessment of the firm’s prospects.
“It’s a new day at Lordstown, and there are no disruptions, and there will be no disruptions to our day-to-day operations,” She said.
Adding: “We remain committed to inspiring, building, and maintaining confidence and transparency in our relationships with each other at Lordstown and, very importantly, with our customers, our partners, our suppliers, and our shareholders.”
In March, short-seller Hindenburg Research revealed a short position in RIDE. Moreover, they claimed the company had misled investors over the demand for its products.
‘The company has consistently pointed to its book of 100,000 pre-orders as proof of deep demand for its proposed EV truck. Our conversations with former employees, business partners, and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.’
The company strongly refuted the claims. However, last week, Lordstown revealed the results of an internal investigation that identified “issues regarding the accuracy” of their preorder book.
The stock has fallen sharply over the last four months and is now 68% lower than the February $31.57 high.
So, does the change of management mean that Lordstown Motors stock offer value at the current price?
We can see on the daily chart the technicals are improving for RIDE.
Firstly, the price has held the support of a rising trend line.
The trend from the May 13th low at $6.70 has been a robust support level and marked the low in the stock for the last two days.
Significantly, RIDE closed above the 50-day moving average at $10.06 yesterday. Furthermore, strong trading volume indicates buyers are returning to the stock.
The levels to watch on the upside are the 19th of May high at $11.65 and the 100 DMA at $14.98.
That being said, given the recent volatility, investors should remain cautious. If the price breaks down below the supportive trend, it could potentially return to the lows.
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