The encyclopedia · Finance & Accounting · Financial decision · 2020–2023
Lordstown went public via SPAC with a truck that didn't exist
Lordstown went public via a $3.3B SPAC in 2020 with 100,000 'pre-orders' that were mostly non-binding. Production stalled. It filed bankruptcy in June 2023.
Lordstown Motors · DiamondPeak Holdings · 2023-06
What happened
Lordstown Motors, founded in 2019, planned to build an electric pickup truck called the Endurance at the former GM plant in Lordstown, Ohio. In October 2020, it went public via a SPAC merger with DiamondPeak Holdings at a $3.3 billion valuation. The company touted over 100,000 pre-orders.
The pre-orders were mostly non-binding reservations, not firm purchases. Hindenburg Research published a short report in March 2021 alleging that Lordstown had misrepresented the pre-orders and that the Endurance was far from production-ready. Lordstown's stock fell 50% in a week. The company later admitted it had 'limited capital' to fund production.
Lordstown produced a small number of Endurance trucks in late 2022 but could not scale manufacturing. In June 2023, the company filed for Chapter 11 bankruptcy and simultaneously sued DiamondPeak's sponsor, alleging the SPAC had misled investors. The $3.3 billion valuation evaporated. The Lordstown plant, which had once employed 15,000 GM workers, sat largely empty.
Why it happened
- The 100,000 'pre-orders' were mostly non-binding reservations — a metric that impressed SPAC investors but did not represent actual demand.
- The SPAC structure allowed Lordstown to go public without the scrutiny of a traditional IPO, at a $3.3B valuation for a company with no revenue.
- The company had no manufacturing capability; the former GM plant required hundreds of millions in retooling that Lordstown could not fund.
- Suing its own SPAC sponsor in bankruptcy was an admission that the entire going-public process had been built on misaligned incentives.
The lesson
A SPAC valuation is not a business plan. Lordstown went public at $3.3B with non-binding reservations and no factory. The SPAC skipped the scrutiny that would have exposed the gap.
Aftermath
Lordstown Motors' assets were sold in bankruptcy. The Endurance truck was never produced at scale. The case, alongside Nikola and Fisker Inc., is cited as an example of how the 2020–2021 SPAC bubble funded EV startups that had no path to production.
Sources
- Lordstown Motors — Wikipedia (founded 2019; SPAC merger October 2020 at $3.3B; 100,000+ pre-orders mostly non-binding; Hindenburg short report March 2021; Chapter 11 filed June 2023; sued DiamondPeak SPAC)
- SEC EDGAR — Lordstown Motors Corp. Form 8-K: Chapter 11 bankruptcy filing (27 June 2023; filed in US Bankruptcy Court, District of Delaware; Cases No. 23-10831 through 23-10833; SEC subpoenas related to DiamondPeak merger and pre-orders; SEC filed $45M proof of claim January 2024)
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