- Shares of Lordstown Motors plunged 48% on Tuesday after the company filed for bankruptcy.
- The electric truck maker is also suing Foxconn for failing to live up to a deal to invest in the company.
Shares of Ohio-based electric truck manufacturer Lordstown Motors plummeted nearly 50% on Tuesday as the company filed for bankruptcy protection.
The stock was down as much as 60% pre-market, and was trading around $1.42 per share at 9:43 a.m. ET, down by about 48%.
The company, which went public in 2020 amid the SPAC boom, is suing Taiwanese electronics producer Foxconn, for failure to follow through on an investment agreement.
While Foxconn had invested $52.7 million in the electric vehicle maker and holds an equity stake of about 8.4%, Lordstown contends that it had agreed to invest up to $170 million. Foxconn has pushed back, noting that the agreement was void when Lordstown's stocks dropped below $1 per share.
"Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown's assets for the benefit of our stakeholders," Lordstown CEO Edward Hightower said in a statement Tuesday. "We will vigorously pursue our litigation claims against Foxconn accordingly."
The Lordstown bankruptcy filing comes with the aim of securing a buyer, which it hopes to find through an auction process.
The company is best known for creating the Endurance electric pickup truck. The business could provide a potential buyer with an opportunity to enter the American EV market, Hightower told Reuters.
Foxconn first entered into partnership with Lordstown on ambitions of helping manufacture a significant portion of the world's EVs. Earlier in 2022, it purchased a former General Motors plant from Lordstown.