Lordstown Motors (OTCMKTS:RIDEQ) stock is in the red today as investors await the July 31 bidding deadline for the once-promising electric vehicle () maker.
What’s up with Lordstown lately?
Well, on Thursday, a U.S. judge ruled that Lordstown will have to face trial for rival Karma Automotive’s accusation that the EV startup used stolen technology in their vehicles. This will likely prove a roadblock to the company’s hopes of a quick bankruptcy sale process.
If you recall, Lordstown filed for bankruptcy this past June. The company also asked Delaware U.S. Bankruptcy Judge Mary Walrath to approve its bidding process so that it could sell assets by the end of next month. According to Walrath, however, the sale of the company cannot be pushed forward while a California court considers the merit of the claims made by Karma.
Karma Automotive first sued Lordstown in 2020 for “allegedly poaching its employees and stealing technology used in vehicle infotainment systems.” The case was set to go to trial in September, before the trial was delayed as a result of the company’s Chapter 11 declaration.
“The critical issue in this case is whether the debtors own the property that they want to sell […] The California court […] should decide those issues,” said Walrath.
Walrath also stated that she intends to review Lordstown’s proposed sales process in early August, following the company’s July 31 initial-bid deadline.
RIDEQ Stock Continues Downward Plunge
RIDEQ stock remains a tentative case. Currently, shares of Lordstown trade on over-the-counter (OTC) “pink sheet” markets because the stock was removed from the Nasdaq following its bankruptcy. Indeed, just days following the Chapter 11 disclosure, Nasdaq issued the company a delisting notice for failure to meet listing requirements.
At the time of this writing, Lordstown Motors stock is trending at $3.33 per share, down about 80% year-to-date (YTD).
According to Thomas Hayes, Chairman at Great Hill Capital, Lordstown represents a growing trend of once-promising EV startups taking a turn for the worst:
“The bankruptcy of Lordstown signals that the days of successful EV startups is in the rear-view mirror […] Moving forward it will be Tesla and the traditional incumbents […] that will duke it out for market share.”
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On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.