Why Lordstown Motors Corp (NASDAQ:RIDE) Stock Doubled in November?

The electric vehicle space has been on a tear in recent days in the stock markets and one of the stocks that could be worth tracking at this point is that of Lordstown Motors Corp (NASDAQ:RIDE). 

Major Triggers

The company was taken over in a black check merger by Diamond Peak Holdings and started trading on NASDAQ in October. Since then, the stock has rewarded its investors and rallied by as much as 40%. While it is true that Lordstown has been traded for just over a month, there are certain signs that could cause excitement among investors. Hence, it could be a good idea for investors to take a closer look at it. 

In this regard, it could be worthwhile to take a look at the Diamond Peak merger. It formed a special purpose acquisition company (SPAC) in a deal that was worth as much as $1.6 billion. The SPAC deal got a lot of attention among investors and for good reason too. Lordstown would get as much as $675 million in the form of proceeds. 

The company is going to use the money to finance the production of electric pickup branded Endurance. Lordstown aims to start production on Endurance at some point in 2021 and there is a possibility of it being the very first electric pickup truck to hit the market. In this regard, it should be noted that Lordstown’s tie-up with automobile giant General Motors is another major reason for the optimism among investors. 

Endurance, which is meant for fleets of commercial pickups rather than for individuals, is going to be produced at a GM factory in Ohio. It is necessary to remember that in 2019 GM had committed an investment of $700 million in Lordstown. 

More importantly, in November, Lordstown announced that as many as 50,000 production reservations of nonbinding nature had been placed for Endurance. The company plans to start the deliveries of the Endurance pick up by September next year. At this point, the company commands a market cap of $4 billion but if it does manage to complete the 50,000 orders it could generate $2 billion in revenues. The company has a compelling product and also the financial wherewithal, which is why it could be worthwhile for investors to keep an eye on it.