Does Foxconn Own Lordstown Motors Now? - What's Going On
Portfolio Pulse from Anusuya Lahiri
Lordstown Motors Corp (RIDE) has filed for Chapter 11 bankruptcy after a rescue deal with Foxconn (HNHPF) failed. The deal involved Foxconn injecting cash and taking over production for Lordstown Motors. However, a dispute arose over the terms of a reverse stock split, with Foxconn claiming it was entitled to purchase 62.7% of Lordstown's common stock. Lordstown's shares were trading at around $3.70 after the reverse split, making the purchase unappealing for Foxconn. In the bankruptcy case, Lordstown intends to sell its remaining assets and IP, with Foxconn being a potential buyer.
June 30, 2023 | 12:00 pm
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NEUTRAL IMPACT
Foxconn's rescue deal with Lordstown Motors failed. The company claimed it was entitled to purchase 62.7% of Lordstown's common stock after a reverse stock split.
The failed deal with Lordstown Motors and the dispute over the terms of the reverse stock split could have an impact on Foxconn. However, it's unclear what the short-term impact on the company's stock will be.
CONFIDENCE 100
IMPORTANCE 75
RELEVANCE 75
NEGATIVE IMPACT
Lordstown Motors has filed for bankruptcy and intends to sell its remaining assets and IP. The company's stock is trading lower.
The bankruptcy filing and the failed deal with Foxconn are negative news for Lordstown Motors. This is likely to have a negative impact on the company's stock in the short term.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100