Lordstown Motors to go public with $1.5 billion valuation
Vice President Mike Pence (right) and Lordstown Motors CEO Steve Burns exit an Endurance pickup at the vehicle's launch event in June.
Robert Schoenberger

Lordstown Motors to go public with $1.5 billion valuation

Reverse merger will generate $675 million to retool Ohio plant for Endurance pickup launch.

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Cleveland, Ohio – Despite a challenging market, Tesla Inc. shares have more than tripled this year, and investors are hungry for more electric vehicle (EV) investment opportunities. Electric pickup startup Lordstown Motors (LM) hopes to use that gold rush for EV value to generate nearly $700 million to launch its first vehicle

LM, which bought General Motors’ (GM’s) Lordstown Assembly Plant in Ohio last year with plans on converting it from Chevy Cruze models to EV trucks, is executing a reverse merger, a financial trick that helps companies go public without the lengthy investor road shows and prospectus filing. LM is merging with Diamonpeak Holdings Corp., a company that went public on the NASDAQ last year as a “blank check company,” a business that collects investors who hope to eventually find a business to buy.

GM and several institution investors are putting seed money into the merger, effectively valuing Lordstown at $1.5 billion. If its stock price rises after the completion of the merger (with ticker symbol RIDE), LM may issue more stock to raise further growth capital.

Such reverse merger are getting popular in the EV space as startups hope to capitalize on market excitement.Nikola, an electric commercial truck company that plans to launch hydrogen fuel-cell- and battery-powered Class 8 trucks, executed a reverse merger in March that valued the company at $3.3 billion. And last month, Fisker Inc., maker of electric sports cars, announced reverse merger plans with another blank-check company, valuing it at about $2.9 billion.

LM has two big differentiators from other startups. The former GM plant, still full of stamping presses, robots, working assembly lines, and paint equipment, gives it a head start on companies looking to build their own plants. And, LM plans to power its trucks with in-wheel hub motors, simplifying design and build.

“We are uniquely positioned to be a leader in the industry,” LM Founder and CEO Steve Burns said. “Our all-electric full-size pickup truck delivers the equivalent of 75mpg and has been systematically engineered and competitively priced specifically for the large commercial fleet market.”

LM unveiled the Endurance at an event in Lordstown at the end of June and has since received enough pre-orders to fill its first year’s production goals, Burns said, about $1.4 billion worth of orders.

Diamonpeak shares had been trading for about $10 before the announcement. Late Monday, they had jumped 16% to about $12 per share.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 20 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.

rschoenberger@gie.net