RADNOR, Pa., April 4, 2021 /PRNewswire/ — The law firm of Kessler Topaz Meltzer & Check, LLP reminds investors that a securities fraud class action lawsuit has been filed against Lordstown Motors Corp. (NASDAQ: RIDE) (“Lordstown”) f/k/a DiamondPeak Holdings Corp. (NASDAQ: DPHC) (“DiamondPeak”) on behalf of those who purchased or acquired Lordstown securities between August 3, 2020 and March 17, 2021, inclusive (the “Class Period”).
Deadline Reminder: Investors who purchased or acquired Lordstown securities during the Class Period may, no later than May 17, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll free at (844) 887-9500; via e-mail at [email protected]; or click https://www.ktmc.com/lordstown-motors-class-action-lawsuit
Lordstown is an automotive company founded for the purpose of developing and manufacturing light duty electric trucks targeted for sale to fleet customers. Lordstown’s purported flagship vehicle is the “Endurance,” an electric full-size pickup truck. DiamondPeak was structured as a special purpose acquisition company.
The Class Period commences on August 3, 2020, when Lordstown and DiamondPeak announced that they had entered into a definitive merger agreement. The August 3, 2020 release provided, in relevant part, that the transaction valued Lordstown “at an implied $1.6 billion pro forma equity value,” and that the transaction was expected to deliver approximately $675 million in gross proceeds. The release also announced that the transaction was expected to close in the fourth quarter of 2020. Throughout the Class Period, Lordstown repeatedly lauded its pre-order agreements with prospective customers. Moreover, Lordstown stated numerous times that it was “on track” to begin production of the Endurance in September 2021.
However, before the markets opened on March 12, 2021, Hindenburg Research, LLC published a report on Lordstown entitled: “The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, and a Prototype Inferno.” The report noted that Lordstown has “no revenue and no sellable product,” and that Lordstown “has misled investors on both its demand and production capabilities.” The report concluded that Lordstown’s “orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” and that a former employee “explained how the company is experiencing delays and making ‘drastic’ design modifications, putting [Lordstown] an estimated 3-4 years away from production,” rather than Lordstown being “on track” for a September 2021 production start. Following this news, the price of Lordstown’s common stock fell approximately 16.5%, down from its March 11, 2021 closing price of $17.71 to a March 12, 2021 close of $14.78.
Then, on March 17, 2021, after trading had closed, Lordstown held an earnings call on which the defendants disclosed that Lordstown had received an inquiry from the U.S. Securities and Exchange Commission (“SEC”). Although Lordstown also issued a press release and a Form 8-K announcing its fourth quarter and full year 2020 financial results after trading closed on March 17, 2021, Lordstown failed to disclose the existence of the SEC inquiry in those filings. Following this news, Lordstown’s stock price fell approximately another 9% in aftermarket trading.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) Lordstown’s purported pre-orders were non-binding; (2) many of the would-be customers who made these purported pre-orders lacked the means to make such purchases and/or would not have credible demand for the Endurance; (3) Lordstown is not and has not been “on track” to commence production of the Endurance in September 2021; (4) the first test run of the Endurance led to the vehicle bursting into flames within 10 minutes; and (5) as a result, Lordstown’s public statements were materially false and misleading at all relevant times.
Lordstown investors may, no later than May 17, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
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SOURCE Kessler Topaz Meltzer & Check, LLP