- Lordstown Motors announced a 1-for-15 stock split, effective Wednesday.
- The move is designed to get its stock price above $1 to avoid Nasdaq delisting and salvage a Foxconn investment.
- Foxconn warned the low stock price meant conditions for its $47.3 million investment were not met.
Struggling electric truck maker Lordstown Motors (RIDE) announced it will effect a 1-for-15 stock split as it tries to prevent being delisted on the Nasdaq and losing a key investor.
Lordstown said shareholders approved the move at the company’s annual meeting on Monday, and the shares will begin trading on the split-adjusted basis as of 12:01 AM Eastern Time Wednesday.
The firm explained that the decision was “intended to improve the marketability and liquidity” of the stock, and will allow shares to rise above the $1 threshold needed to satisfy Nasdaq listing requirements.
In addition, Lordstown noted the move should lead investor Foxconn to go forward with the electronics company’s deal to buy approximately 10% of Lordstown stock for $47.3 million. In April, Foxconn argued that because of the potential delisting, conditions for the purchase were no longer being met. Lordstown has disputed Foxconn’s position, but added that if the split raises the value of the shares beyond $1 and the stock remains listed on the Nasdaq, the transaction can close.
The news didn’t help Lordstown shares, which fell over 5% on Tuesday and have been trading near all-time lows.