Lordstown Motors’ first investor, Workhorse Group, has sold most of its stake in the start-up

Electric delivery truck maker Workhorse Group Inc. said Monday it has sold much of its stake in Lordstown Motors Corp. this summer, reducing its stake in the struggling Ohio-based startup.

Workhorse, in a company filing, said it has sold 11.9 million shares of Lordstown Motors since July 1, reducing its 9% stake by almost three-quarters. Workhorse, also based in Ohio, was an early investor in Lordstown Motors, which was formed in 2019 by Workhorse founder and former CEO Steve Burns, an entrepreneur who previously built tech companies. and marketing.

The divestiture comes ahead of the planned launch of Lordstown Motors’ electric truck in September. The startup is strapped for cash and is trying to raise additional capital to ensure its survival.

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The start of production of Lordstown Motors’ first pickup, the Endurance, is a crucial target for the start-up, which went public last fall thanks to a reverse merger with a specialist acquisition company, or SPAC. .

Over the past few months, the company has been rocked by a number of challenges, including federal investigations into its business practices and the exit of Mr. Burns.

Workhorse said it made $ 79 million from the sale of its Lordstown Motors shares. Lordstown Motors stock was trading at $ 5.77 per share on Monday morning, down 2.7% after Workhorse said it had reduced its stake.

The divestiture comes ahead of the planned launch of Lordstown Motors’ electric truck in September. (Lordstown Motors / Lisa Acierno / Document via REUTERS)

Lordstown Motors did not immediately respond to a request for comment.

Workhorse, established in 2007, develops and sells electric delivery trucks and vans for parcel delivery companies and utilities. It became public in 2010 through an offer on the over-the-counter market.

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Workhorse’s ties to Lordstown Motors go beyond its equity stake; several former Workhorse executives had followed Mr. Burns to Lordstown Motors after he started the electric truck business.

Lordstown Motors executive chairman Angela Strand, who oversees the company after Mr. Burns left in June, served as vice president of Workhorse until 2018. Others who have joined Mr. Burns of Workhorse have since left, including the former CFO of Lordstown Motors. officer and chief operating officer, and his daughter, Brittney Burns, who had been the company’s marketing director.