Lordstown Motors Stock finally had something to celebrate. Auto industry veteran and former Icahn Enterprise head Daniel Ninivaggi is set to take the wheel. The news that Ninivaggi will take the lead at the under-fire EV startup sent the stock sharply higher on huge volume Thursday. RIDE traded as high as $7.79 intra-day (+41.0%) before settling higher by 17.79% at $6.49.
Lordstown Motors Corp (NASDAQ: RIDE) has had a torrid time this year. Coming into yesterday, RIDE had lost more than 73% since the start of the year and was 85% below its all-time high. After coming to market via a reverse-merger SPAC deal with DiamondPeak Holdings Corp, RIDE climbed as high as $31.80 per share in October 2020. However, by November, Lordstown Motors stock was changing hands below $13.00. In the following three months, the stock fluctuated wildly and twice scaled $30.00 before reversing. However, after reaching $31.57 in February, RIDE has been on a one-way trip lower.
In March, Lordstown caught the attention of notorious short-seller, Hindenburg Research who released a paper claiming the company had misled investors and falsified sales projections, leading to probes by the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC). As a result, last week, RIDE reached an all-time low of $4.77.
Investors will be hoping the appointment of Ninivaggi will mark the start of a turnaround in the price of the stock. And although the high-profile hire does inspire confidence, RIDE still has an uphill climb ahead.
RIDE Price Forecast
The daily chart shows that on Monday, the stock finally broke free from a descending triangle formation. Notably, we see the buying accelerated on yesterday’s news, penetrating the 50-day moving average at $7.37. Furthermore, almost 140 million shares were traded, more than double the previous one-day record.
However, the Lordstown Motors stock price reversed late in the day, suggesting the buying was short-covering rather than new longs, which may be concerning.
For me, the outlook is still unclear. The company is yet to deliver any vehicles, and until that happens, RIDE will be a gamble. Furthermore, despite the bounce, the price was at the same level earlier this month. Unless RIDE continues to stabilise and advances past the 200-day moving average at $11.86, I remain sceptical.
The best course of action will be to see how the new CEO performs in the next few months. If Lordstown starts to show fundamental improvements, the stock price should follow. And considering how far it has fallen, investors will still have plenty of upside if Ninivaggi turns the company around.