A rough $RIDE at Workhorse

The troubled EV legacy of Steve Burns


EV stocks are hot! And also messy. Lordstown Motors (RIDE) and Workhorse Group (WKHS) are two electric vehicle (EV) companies that have gone from hot to not. Both companies are currently under investigation by the SEC. Both companies have high short interest and suffering stock prices. Both companies went public via SPAC and (surprise!) they have the same founder, Steve Burns. The companies made it into mainstream awareness through a Trump tweet. What’s not to love?


A WKHS Department of Justice investigation was in the news last week, bringing the company back into the limelight.

We were amused to see that on November 12th, RIDE disclosed that the technology they acquired from WKHS in 2019 has a new useful life of “zero months” (flagged by Bedrock algorithms). The technology in question is a license for intellectual property (IP) related to WKHS’ “W-15 electric truck platform”[1]. In plain language, RIDE decided that the W-15 electric truck IP is useless to them.

"Given the lack of Workhorse technology used in the Endurance and new management’s strategic direction of the Company...we deemed it appropriate to change the useful life of the technology we acquired from Workhorse to zero months." RIDE | 10-Q | 2021-09-30

It sounds like RIDE is trying way too hard to avoid the word “impairment”. Saying that technology will be useful for “zero” more months is just weird. It’s not typical accountant-speak. Here’s a definition of impairment from Investopedia for those unfamiliar. It’s obviously considered a bad thing, and RIDE appears intent on avoiding the language.

When Burns was CEO of RIDE, RIDE gave up 16.5M shares to obtain rights to the W-15 technology from WKHS, Burns’ former company. WKHS discontinued the W-15 electric truck project in early 2020 or late 2019, within months of the IP sale to RIDE. The decision that the technology is not usable comes shortly after Burns’ resignation from RIDE in June 2021.

Given Burns’ previous involvement with WKHS, the “zero months” disclosure reads like the new management of RIDE is throwing shade at their former CEO. Shall we say Burns got burned?

Being spurned by RIDE is the least of WKHS’ worries. In addition to the ongoing DOJ and SEC investigations, on November 8th WKHS suspended deliveries of its C-1000 vehicles (their only product) and recalled the 41 vehicles that had already been delivered. WKHS also announced that they would not be “renewing the employment agreements” of their COO and CFO in September.

Here’s something you probably didn’t know! During Q4’2020 approximately 40% of WKHS’s production employees tested positive for COVID-19! That’s a lot! WKHS’ COVID-19 safety disclosure was decidedly shorter than others we’ve read.

“However, during the fourth quarter of 2020, the Company experienced an outbreak of COVID-19 cases amongst our employees. Approximately 40% of our production employees tested positive for COVID-19. Additionally, several of our suppliers experienced capacity constraints due to the pandemic, which has limited their shipment volumes. As a result, we experienced a significant reduction to our planned production volume in the fourth quarter of 2020.”

As alluded to above, Steve Burns and the then CFO resigned from RIDE in response to allegations that they had misled investors over pre-orders in mid-2021. Burns no longer appears to be involved with RIDE. Shea Burns, however, does still work with the company. Are the two men related? We’re not sure but please comment if you know! (We’re driven by curiosity only.) Burns is no longer an executive of WKHS but has a consulting agreement with the company. Burns’ name has not come up in the WKHS disclosure recently and he, therefore, does not appear to be actively involved with the company at this time. One cannot help wondering what Burns is working on now. Maybe his next company will achieve what WKHS and RIDE could not? Over the last month, another EV stock has seen a lot of upwards (and sometimes downward) momentum, Lucid Group (LCID). LCID also went public via SPAC. Despite missing earnings and some compliance flags, LCID has plans to build 20,000 vehicles next year, driving excitement.

According to the 10-Q LCID filed on November 15th, the company has an unremediated control weakness related to verifying “vendor records for payment remittances”. If you’re unfamiliar with internal control weaknesses, I suggest checking out our Red Flag Guide I.


What’s your favourite EV company? We wrote about a few in April. Share your best EV stories (good or bad) with us in the comments section. None of the above is investment advice and we are not investment advisors. Do your own research. [1] “On November 7, 2019, the Company entered into a transaction with LMC pursuant to which the Company agreed to grant LMC a perpetual and worldwide license to certain intellectual property relating to the Company’s W-15 electric pickup truck platform and its related technology (the “Licensed Intellectual Property”) in exchange for royalties, equity interests in LMC, and other consideration (the “LMC Transaction”).” ~ WKHS 2019-12-31 10-K

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