Lordstown Motors Corp. shares slid after The Wall Street Journal reported that the troubled electric-vehicle startup is being investigated by the U.S. Justice Department.
The inquiry is being handled by the U.S. attorney’s office in Manhattan and is in its early stages, the newspaper said, citing unnamed people familiar with the matter.
“Lordstown Motors is committed to cooperating with any regulatory or governmental investigations and inquiries,” spokesman Ryan Hallett said by email. “We look forward to closing this chapter.”
Lordstown shares declined 11 percent to $9.24 in afternoon trading in New York after dropping to $8.56, their intraday low since May 25. The stock had plunged 48 percent this year through Thursday.
Lordstown, which acquired a defunct General Motors plant in Ohio in 2019, has been trying to get its electric pickup trucks into production by September. The company went public in November through a reverse merger with special-purpose acquisition company DiamondPeak Holdings.
The startup has suffered a series of upsets in recent months and has attracted scrutiny from regulators. In March, Lordstown said it had received an inquiry on its operations from the Securities and Exchange Commission.
Demand for its trucks has been central to the company’s troubles. Company founder and former CEO Steve Burns was removed after the board determined that he had overstated orders for the truck, with claims of 100,000 pre-orders. The board’s investigation followed a short-seller’s report accusing Burns of overhyping real interest in the Endurance.