The stock of Lordstown Motors plunged 58% in premarket trading on news of the bankruptcy filing. Prior to today, the company’s stock had declined 90% over the last year to trade at $2.76 U.S. per share.
Lordstown went public in October 2020 through a reverse merger with special purpose acquisition company (SPAC) DiamondPeak Holdings.
The bankruptcy filing comes after the electric truck manufacturer failed to resolve a dispute over a promised investment from Taiwanese electronics manufacturer Foxconn.
Lordstown simultaneously filed a lawsuit against Foxconn as it seeks creditor protection.
Lordstown Motors, which is named after the Ohio town where it is headquartered, accused Foxconn of failing to honour an agreement to invest up to $170 million U.S. in its operations.
Foxconn previously invested more than $50 million U.S. in Lordstown Motors and holds an 8.4% stake in the automaker.
Foxconn has said that Lordstown breached the investment agreement when the automaker's stock dipped below $1 U.S. per share.
Lordstown, an electric vehicle start-up launched in 2018, has as its main product the Endurance pick-up truck, which is built at a former General Motors (GM) factory and is primarily used by commercial customers and municipal governments.
Lordstown paused production of the Endurance electric truck earlier this year but resumed production in April albeit at a low rate.
While Lordstown filed for bankruptcy seeking another company to buy it, the automaker does not yet have an acquisition offer.
Lordstown chief executive officer (CEO) Edward Hightower has said that the company’s Ohio production facility and Endurance truck could be attractive to another automaker looking to enter the U.S. electric vehicle market.