(Bloomberg) -- General Motors Co. sold its 7.5 million shares in startup Lordstown Motors Corp. in the fourth quarter, taking a loss on its investment in the struggling electric-truck startup.
GM exited the stake over the course of the quarter, a company spokesman said Tuesday. That suggests GM received between about $26 million and $60 million, based on Lordstown's share prices during the period, below GM's initial investment of $75 million.
The sale all but ends a relationship that stretches to 2019, when Lordstown bought a shuttered Ohio assembly plant from GM for about $25 million. The Detroit-based automaker later became one of the investors in the EV startup, giving Lordstown cash and other operating assistance.
While GM lost money on the investment, the company got out before things got worse. After tumbling as low as $3.45 a share in the fourth quarter, Lordstown's stock has fallen further in 2022. The shares traded at $2.71 as of 3:24 p.m. Tuesday in New York.
Lordstown plunged 20% on Monday after the company reported fourth-quarter earnings. During the call with analysts, the company said that its plans to build 500 Endurance plug-in pickup trucks this year and 2,500 next year rest on a tentative agreement with Foxconn Technology Corp. to sell the Lordstown assembly plant and have the Taiwanese company build its trucks.
The deal has yet to close and Lordstown is looking to raise about $250 million to execute its plan and start building in the third quarter, executives said.
The Detroit Free Press reported GM's share sale earlier.
©2022 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
