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Why Lordstown Motors Stock Drove Higher Tuesday

What happened

Lordstown Motors (NASDAQ: RIDE) shareholders haven't had a great ride so far in 2021. The stock is down 50% year to date. And that is after shares have soared almost 30% in the last week. That includes a more than 20% jump today, as of 3:50 p.m. EDT.

So what

The striking reversal came as the company announced yesterday that it will host a "Lordstown Week" next month. That could be significant in answering many of the lingering questions that have been raised, and which also played a large role in driving shares lower this year.

Lordstown Endurance electric pickup truck. Image source: Lordstown Motors.

Now what

Much of the negative sentiment on the stock came when short-seller Hindenburg Research put out a report on the electric vehicle maker. It questioned the legitimacy of Lordstown's published data for preorders of its electric Endurance pickup truck. Subsequently, the company announced it was under investigation by the Securities and Exchange Commission (SEC) regarding the accusations.

But investors are cheering the news this week that the company is opening its factory doors and allowing investors, analysts, customers, and partners to tour the plant, test drive the product, and attend presentations for a week in June.

Lordstown's management team will host attendees from June 21 through June 25. While the invitation doesn't directly resolve questions, the offer seems to have investors believing that the company will be able to assuage many, if not all, concerns. And shares are shooting higher today as a result.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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