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Electric delivery truck maker Workhorse Group Inc. said Monday it sold down much of its stake in Lordstown Motors Corp. this summer, reducing its equity position in the embattled Ohio-based startup.
Workhorse, in a company filing, said it had sold 11.9 million shares in Lordstown Motors since July 1, reducing its 9% stake by nearly three-quarters. Workhorse, also based in Ohio, was an early investor in Lordstown Motors, which was established in 2019 by Workhorse founder and former chief executive Steve Burns, an entrepreneur who had previously begun tech and marketing companies.
The divestiture comes ahead of Lordstown Motors' planned electric-truck launch in September. The startup is cash-strapped and trying to raise additional capital to ensure its survival.
LORDSTOWN MOTORS DISCLOSES JUSTICE DEPARTMENT INVESTIGATION
Starting production of Lordstown Motors' debut pickup truck, the Endurance, is a crucial target for the startup, which went public last fall through a reverse merger with a special-purpose acquisition company, or SPAC.
In recent months, the company has been rocked by numerous challenges, including federal investigations into its business practices, and the exit of Mr. Burns.
Workhorse said it netted $79 million from selling down its Lordstown Motors shares. Lordstown Motors stock was trading at $5.77 a share Monday morning, down 2.7% after Workhorse reported it reduced its stake.