Lordstown Motors Shares Fall After Company Says It’s Running Out of Cash and Wendy’s Shares Rise as Retail Traders Feed Meme-Stock Frenzy
On Tuesday, shares of Lordstown Motors tanked, closing down 16.27%.
Shares of the American electric vehicle automaker fell after the company announced it is running out of cash.
Lordstown is working on an electric pickup named the Endurance, with manufacturing set to begin this year. In a filing Tuesday, Lordstown Motors said, “The Company believes that our current level of cash and cash equivalents are not sufficient to fund commercial-scale production and the launch . These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the consolidated financial statements included in this report.”
Lordstown is one of a slew of electric vehicle manufacturers that have gone public in the last year thanks to a merger with a special purpose acquisition company, or SPAC. However, creating and developing a car is costly, and as the number of EVs on the market rises, the firm may find it more challenging to raise funds.
Shares of Lordstown Motors have fallen over 40% this year.
On Tuesday, shares of Wendy’s jumped, closing up 25.85%.
Shares of the American fast-food chain rose as retail investors dumped their money into “meme-stocks.”
While no one knows with absolute certainty, most investors attributed Wendy’s stock rise to the meme-stock frenzy, which has expanded beyond its original targets of companies like AMC Entertainment and GameStop. Investors who are following the meme-stock trend are looking for new ideas and new companies to profit from. Some ambitious investors believe the American fast-food chain has more upside, despite the stock being at 17-year highs.
Shares of Wendy’s have risen over 30% this year.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.