As of October 26, Lordstown Motors Corp. is now trading on the Nasdaq stock exchange, thanks to special purpose acquisition company DiamondPeak Holdings Corp. Detroit News reports that the combination of Lordstown with the holding company was approved October 22, which enabled Lordstown to sell company shares.
NBC News reports that Lordstown stock, traded under the stock market symbol “RIDE,” rose as high as $21.75 but traded beneath $20 for most of the day and closed at $18.97.
“We are proud of this momentous occasion,” said Steve Burns, founder and CEO of Lordstown, in a statement. In a video message, Burns said Lordstown’s stock market debut would bring the company “the necessary resources to bring the Endurance to market.”
“We are thrilled about the successful execution of this merger, said David Hamamoto, Chairman and Chief Executive Officer of DiamondPeak, who noted General Motors’ investment in the deal. “We look forward to our long-term partnership with Steve and the entire Lordstown team as they progress towards being first to market with an electric pickup truck for commercial fleets.”
The electric-vehicle startup company is one of others looking to use special purpose acquisition companies, or SPACs, to court public investments. In March, Nikola Corp. merged with VectoIQ Acquisition Corp., which allowed the company to be listed as “NKLA” on the Nasdaq stock exchange.
According to NBC News, SPACs, also known as “blank-check companies,” appeal to start-ups because they allow entrepreneurs to quickly start raising money on Wall Street via a more streamlined process than traditional initial public offerings. Initial public offerings in SPACs are offered before the company has any existing business operation, after which the companies have two years to purchase a company that does have one or return investors’ money.
Lordstown plans to use proceeds raised by trading stock to fund the production of its Endurance electric work truck and, according to the company, has already received more than 40,000 nonbinding pre-orders for the $50,000 vehicle—about $2 billion in potential revenue. Production of the Endurance is expected to begin in 2021.