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Lordstown Motors Stock Price Slumps 4%: Will RIDE ever recover?

Despite the Lordstown Motors stock price trading at a new all-time low this week, 85% below its peak, one analyst says RIDE is still overvalued. And after two days of gains, Lordstown Motors Corp (NASDAQ: RIDE) returned to form yesterday, sliding $0.22 (4.01%) to its lowest ever closing price.

Considering electric vehicle maker Lordstown Motors was trading above $30 six months ago, its collapse to single digits is even more tragic. The under-fire start-up has suffered a series of almost fatal blows recently. The catalyst for the fall from grace was undoubtedly the report from Hindenburg research in May that accused the SPAC of misleading investors by falsifying sales forecasts. At the time, Lordstown denied the claims. However, it has since come to light that Hindenburg was onto something. This led to the departure of Lordstown CEO Steve Burns and CFO Julio Rodriguez. Furthermore, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have launched probes into the General Motors-backed company.

In July, Investment firm Yorkville Advisors pledged to buy $400 million of RIDE shares over the next three years. However, the excitement was short-lived, and the Lordstown Motors Stock price resumed the slide.

Further pressure was heaped on shareholders last week when investment bank RBC publish its first research note on the stock. The analyst rated RIDE underperform, with a $1.00, 12-month price target, suggesting an 80% drop from Wednesday’s closing price.

RIDE price Forecast

Turning to the daily chart, it’s evident how poorly the stock has performed this year. RIDE has lost more than 70% since January the 4th, resulting in a narrowing trading range that will soon end. Conventional wisdom says that if the price breaks out of the pattern, a large move should occur. The top end of the triangle pattern is seen at $5.62, and on that basis alone, RIDE could pop if it clears $5.62. Although, it’s debatable whether the rally would be sustainable.

On the flip side, the trend support is visible at $4.80, and if the stock breaks down through there, RBC’s bearish call could come to fruition.

Unfortunately, the outlook is too unclear to decide whether Lordstown Motors is a worthwhile investment. For now, investors should steer clear of this one and see what the future brings.

Lordstown Motors Stock price Chart (Daily)

Lordstown motors stock price prediction

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