Lordstown executives sold $8 million in stock ahead of financial reporting

Five top Lordstown Motors executives sold roughly $8 million in stock over the course of three days in February, before reporting end-of-year financial results for the first time as a public company, the Wall Street Journal reports.

The big picture: The electric-vehicle startup went public via SPAC last year at a $1.6 billion valuation, despite having never made or sold one of its vehicles. It reported losses in March that were more than double analyst expectations, according to the Journal.

• In March, Hindenberg Research accused Lordstown of faking its pre-order information. The company acknowledged that some of the statements regarding pre-orders were inaccurate, but denied the rest of the allegations included in Hindenburg's report, per WSJ.
• Earlier this month, Lordstown said it did not have enough money to begin production, before walking that statement back. The troubled company's stock is down nearly 50% over the past six months.

What they're saying: An analyst at InsiderScore, Max Magee, told WSJ of the stock sales, “We wouldn’t expect insiders to typically sell at that time in the quarter.”

• A special committee formed by Lordstown's board said it looked into the sales and concluded they “were made for reasons unrelated to the performance of the company.”
• “At best, it suggests the company has weak internal control over the trading of their officers,” Daniel Taylor, an accounting professor, said.

Our thought bubble via Axios' Felix Salmon: "Lordstown Motors went public via SPAC, a process that involves much less disclosure than a normal IPO. The latest revelations only serve to underscore the narrative that in such companies, public shareholders are the patsies while corporate executives can trade with much more information and insight into the true state of the company."

Go deeper: Unpacking the Lordstown Motors fiasco