A move to try to pump up the deflated price of Lordstown Motors Corp.’s common stock achieved the desired result on the first day of trading after the reverse stock split was in effect — an increase in share value.
Now, the startup electric vehicle maker must go nine more days in a row with a closing price of at least $1 per share to regain compliance with Nasdaq’s minimum bid price requirement or risk being delisted from the exchange.
The exchange April 21 notified Lordstown Motors it had fallen out of compliance with the rule because the stock — traded under the RIDE ticker — had fallen below $1 per share for 30 consecutive days, from March 7 to April 18.
The company was given until Oct. 16 to come back into compliance. In fact, Lordstown Motors can achieve compliance with the rule if it has a closing price of more than $1 per share for any 10 days in a row with that 180-day period.
Even after that, Lordstown Motors can ask the exchange for more time.
On Wednesday, two days after shareholders approved the split at their annual meeting, the stock opened trading at $4.19 per share and closed at $3.78 per share, according to Nasdaq.
It reached a high value of $4.97 per share and traded at a low of $3.60 per share, according to Nasdaq.
In comparison, the stock closed trading Tuesday at 28 cents per share.
The 1:15 split, determined by the company’s board of directors, caused each 15 shares of the company’s issued and outstanding common stock to be combined into one share of issued and outstanding common stock.
The split may also go a way toward helping save a $170 million investment from Foxconn, the Taiwanese tech and electronics company that acquired its Lordstown auto assembly plant from Lordstown Motors in May 2022.
Lordstown Motors on Tuesday, however, gave no assurance the split would be enough to persuade Foxconn to close on a stock purchase of about $47.3 million — funding critical to the survival of the company.
If Lordstown Motors’ stock can stay at least $1 or more for 10 consecutive days and the exchange notifies the company it’s back within the rules, “that may satisfy Foxconn’s (incorrect) interpretation of the closing condition and cause Foxconn to close the transaction,” according to the company Tuesday.
Lordstown Motors and Foxconn in November signed a $170 million equity investment agreement that called for Foxconn to close on a second investment round May, however, Foxconn notified Lordstown Motors that because the company had fallen out of compliance with trading rules, Foxconn believed Lordstown Motors was in breach of the agreement.
Lordstown Motors disagreed. On Tuesday, the company said it remains ready and willing to close on the deal.