Lordstown Motors could be a supplier down the road - Morgan Stanley

Apr. 22, 2021 8:31 AM ETLordstown Motors Corp. (RIDE)RIDEBy: Clark Schultz, SA News Editor14 Comments
  • Morgan Stanley analyst Adam Jonas says the firm is keeping an open mind on Lordstown Motors (NASDAQ:RIDE), while still sticking with an Underweight rating for now.
  • Jonas' numbers check on RIDE: "The enterprise value of the company at yesterday’s close now stands at approximately $1.3bn. That’s $1.3bn for a 600k unit installed capacity plant (including tooling, permitting, etc) that is being planned for a full retrofit to EVs. GM lists 40 plants on its media site globally and has an enterprise value of approximately $80bn (ex-pension) or $2bn per plant."
  • He notes that RIDE has no revenue currently and has never manufactured a single series production car, which leads the team to wonder if whether at the current valuation some investors could potentially see RIDE as worth more as a plant itself rather than as an in-hub motor EV pickup company.
  • On the positive side, Jonas thinks there could be another use case for the company's assets other than making full vehicles (batteries, packs, eDrive systems, EV skateboard architectures, etc.).
  • Shares of RIDE are down 1.55% in the premarket session after Goldman Sachs dropped its rating to Neutral from Buy.

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