Lordstown Motors Stock Surges as Firm Nears Factory Sale

The stock is set to topple a long-term rejection level today

Deputy Editor
Sep 30, 2021 at 9:31 AM
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The shares of Lordstown Motors Corp (NASDAQ:RIDE) are up 6.9% at $7.36 this morning, following news that the electric vehicle (EV) company is nearing a deal to sell its Ohio-based car factory to Taiwan's Foxconn Technology, according to those familiar with the matter. Per these reports, the company will likely reach an agreement as soon as this week. The transaction's value is not yet known.

The stock is still far off from its annual highs near the $30 level, touched in mid-February, but a bull gap in late August has helped separate the stock from its record lows, while the $6 level looks to have emerged as a floor for RIDE during the past month. Today's pop has the equity set to break north of the 100-day moving average for the first time since February, though Lordstown Motors stock still sports a 63% year-too-date deficit. 

Analysts have been cautious on the EV name. Of the five in coverage, just one call RIDE a "strong buy," while three say "sell" or worse. The 12-month consensus price target of $4.57, meanwhile, is a whopping 37.9% discount to last night's close. 

Short interest on the equity is still astronomically high, despite a 3.7% drop during the last reporting period. In fact, the 30.27 million shares sold short account for 27.2% of the stock's available float, or three days worth of pent-up buying power. 

 

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