Lordstown Motors is selling assets to Foxconn
Options traders are blasting red-hot Lordstown Motors Corp (NASDAQ:RIDE) today, after news that the electric vehicle (EV) company is selling its Ohio facility to Foxconn, a Taiwan-based electronics company. Lordstown Motors has been struggling with supply chain issues and material costs, and leading up to it, the general consensus was that the company’s short-term survival hinged upon this deal.
Still deep in penny stock territory, today’s blast higher has RIDE rebounding from yesterday’s record low of $1.50. Up 52.6% to trade at $2.30 at last check, the stock remains down roughly 68% year-over-year. It’s also worth noting that this volatility has stock landing on the Short Sale Restricted (SSR) list.
Options volume is running at 8.4 times the usual daily volume already. So far, 38,000 calls and 24,000 puts have been exchanged. The weekly 5/13 2.50- and 2-strike calls are the most popular, with new positions opening at both.
Analysts are wholeheartedly bearish, leaving plenty of room for upgrades, with two of the four in coverage carrying a lukewarm “hold,” and two a “sell” or worse. Meanwhile, short interest represents a hefty 23.2% of the stock’s available float, or over five days’ worth of pent-up buying power.