Lordstown Motors earnings: here's what we can expect

Lordstown Motors will post its first quarterly earnings results since the company went public. Yahoo Finance's Brian Sozzi breaks down what to expect.

Video Transcript

MYLES UDLAND: All right, welcome back to "Yahoo Finance Live." Later today, Lordstown Motors set to report its first quarter since completing that SPAC acquisition. Brian Sozzi, been a tough couple of weeks for Lordstown shareholders here.

BRIAN SOZZI: Yeah, you could feel that nervous anticipation on this report. Lordstown shares are down about 3% today. As you mentioned, they will report their first earnings report as a public company. They went public on October 26 in a SPAC transaction. First report out after the close today. And it will be very closely watched for a number of reasons. First, it's unlikely Lordstown will have any revenue. They're still not targeting selling any trucks until later September, and producing any trucks.

And number two, last week, shares came under a lot of pressure because of a new Hindenburg Research report. Now attacking the company, questioning the credibility of the CEO Steve Burns and some of the targets that he has, in fact, put out. Now we just talked to Steve Burns on our network on February 23. Here's what he told us about pre-order demand, which was cited in that Hindenburg report.

STEVE BURNS: We have pre-sold 100,000 of these to various fleets across America, so really a big appetite. You've got a fleet that's been using a 17-mile per gallon pickup truck for the last 30 years, and we come out with one that gets the equivalent of 75 miles per gallon. And it's just what we had hoped. A lot of pent up demand, a lot of excitement around it.

BRIAN SOZZI: So it's, Julie and Myles, it's very much show time for Steve Burns and Lordstown Motors. I think they have to have a conference call where they go through line by line on when their truck, called the Endurance, will in fact, come out. They have said repeatedly that that will be September. When will this truck hit? Who were the buyers? Precisely how many pre-orders do they, in fact, have?

Do they have that 100,000? And what constitutes a pre-order? There are a lot of line items, and it's a very extensive Hindenburg report. Steve Burns has to come out here and refute a lot of that stuff. We haven't heard much from him just yet. A spokesperson told me a couple of days ago that they do plan to refute everything in that report. So now it's show time for him.

MYLES UDLAND: Yeah, and I think, Sozzi, it also is a reminder that we've been talking about and thinking about and hearing about Lordstown for some time now, because the acquisition was announced. Then there's a lead time from, so they have the investor presentation, right, so that's what we've learned about the company. Then there's a lead time from the announcement that they would be this back target of the SPAC sponsor that is bringing them public.

Then the deal closes. Then they do a quarter. Then they report the quarter. So it takes a lot of time for companies to reach the life cycle where they are putting out results on a quarterly basis. As you mentioned, Lordstown not expected to have any revenue to report. Company we've talked to, QuantumScape, kind of in that same boat. I mean, their CEO has come on multiple times and said we're looking at 2023 or 2024. And they've been very clear about that commercialization timeline for a number of years.

And it's going to be very interesting in the coming quarters. And maybe it'll take longer. Maybe it's really the next four quarters or next six quarters. But all of these SPACs that we talk to, we maybe look sideways at, maybe people get excited about them, they're all going to have to start reporting these kinds of results. And it'll just be interesting to see how much their story does or does not hold up. I don't know if it's really going to take a Hindenburg report for every SPAC for the market to maybe start to rethink some of the enthusiasm that's been built into pretty speculative pie in the sky type stuff.

BRIAN SOZZI: No, and that's a great point, Myles. And a key flaw I would say in the SPAC process that continues to get overlooked, it's great to come public, you come out with a splashy news conference and investor call and a 30-page slide deck, but you're out there, you are now a public company. And if you have no revenue, you're going to have to keep investors involved in this story until, in fact, you have revenue and profits.

But I do want to add this. Lordstown does appear to be a different story than Nikola. Lordstown has a plant. They have really refurbished that plant. You can see the photos. It actually exists. They bought that plant from GM. They have a real truck that does appear to be going into production in September. So there are real tangible things here that weren't I think, in the picture at Nikola when Hindenburg attacked them.

MYLES UDLAND: Yeah, look, I mean, having a truck that works is fine. Having 100 trucks that work is great, 1,000, 10,000 even. But just told us there's 100,000 orders. And so I think a lot of distance between all those intervals. And look, it's all shades of gray, right? There's a very large difference between somewhat underperforming your very ambitious targets and then perpetrating an outright fraud. And so I think there's going to be a lot of the former.

There's going to be a lot of companies that just materially underperform some of these numbers from 2024 adjusted EBITDA. And we all see the slide on the presentation, right, where they comp themselves to mega successful publicly traded companies on 2024 adjusted EBITDA numbers. I mean, the stuff's just ridiculous. But look, that's the game, that's what the SEC allows, and so we play it as it lies. And it'll be interesting to see how this unfolds over the coming years as some of these ideas are forced into something like maturity.