Investor's Corner
Lordstown Motors continues cash flow woes, sells Ohio plant to iPhone manufacturer Foxconn
Lordstown Motors, an electric vehicle startup based in Ohio, has announced that it has agreed in principle to work jointly on electric vehicle programs with iPhone manufacturer Hon Hai Technology Group, more commonly known as Foxconn.
Lordstown announced earlier this year that it was struggling with significant cash flow problems and that it would likely not sustain enough capital to keep its doors open through the end of June 2022. Lordstown said in a June 2021 filing with the SEC that its ability to stay open “is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial-scale production and launch the sale of such vehicles.” With cash issues, the automaker was likely forced to enter a joint partnership with a company that did not have financial worries. Foxconn appears to be Lordstown’s choice.
On Thursday, Lordstown confirmed the joint partnership with Foxconn:
Lordstown Motors Corp, a provider of electric light duty trucks focused on the commercial fleet market, today announced that the Company and Hon Hai Technology Group (“Foxconn”) have reached an agreement in principle to work jointly on electric vehicle programs in the Company’s assembly plant in Lordstown, Ohio. In connection with this announcement, the Company is today updating its production plan and financial outlook.”
Following the June 2021 filing that indicated Lordstown was set for closure within a year, the company made several changes in its boardroom. It relieved CEO Steven Burns and CFO Julio Rodriguez of their duties just days later. After appointing Becky Roof to Interim CFO and Angela Strand to Executive Chairwoman, the company then began to scramble to find financial support. However, Lordstown’s worries did not end there. Following a report from Hindenburg Research that claimed Lordstown was exaggerating its pre-order figures, especially after former CEO Burns stated that the company had accumulated 100,000 orders for its initial vehicle, the Endurance pickup.
The SEC decided to issue a post-effective amendment No. 2 to an S-1 registration statement, requesting more information and documentation that could prove Lordstown’s claimed pre-order counts. Lordstown obliged to the subpoenas. In late August, it announced that its new CEO would be Daniel Ninivaggi, a veteran of both Icahn Automotive Group LLC and Hertz Global Holdings, Inc. where he served as Director.
The new partnership with Foxconn helps Lordstown solidify its plans to manufacture the Endurance:
The Lordstown Motors team continues to move forward with its plan to build a limited number of vehicles for testing, validation, verification and regulatory approvals during the balance of 2021 and the first part of 2022. In light of the Foxconn agreement, the Company will evaluate the potential impact of the parties’ contract manufacturing relationship on commercial production, supply chain opportunities with Foxconn and the appropriate integration and timing of the parties’ operations teams and will provide an update on its production plan during our upcoming Q3 2021 earnings call currently slated for mid-November.”
It also updated its financial outlook, which consists of revised figures from the Q2 2021 Earnings Call:
- Capital expenditures – unchanged in total from $375 to $400 million, including changes in timing of tooling and equipment purchases and the inclusion of forecasted soft tooling expense purchases previously included in R&D expense.
- SG&A expenditures – $105 to $120 million, up from $95 to $105 million, primarily due to higher legal and professional fees.
- R&D expenditures – $320 to $340 million, up from $310 to $320 million, largely due to increased prototyping and pre-production expenses, reduced by the impact of moving forecasted soft tooling expense to capital expenditures as mentioned above.
- Cash balance on September 30, 2021 – $210 to $240 million, down from $225 to $275 million, which includes approximately $20 million of proceeds from the issuance of common stock under the Company’s Equity Purchase Agreement in August and September but excludes proceeds from Foxconn’s purchase of $50 million of the Company’s common stock as announced today.
Don’t hesitate to contact us with tips! Email us at tips@teslarati.com, or you can email me directly at joey@teslarati.com.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Starlink gets its latest airline adoptee for stable and reliable internet access
Tesla nears closure of Full Self-Driving purchasing option
