Massive Sell-off of Shares by US Electric Vehicle Rose Town Investors

[Asia Economy Reporter Yujin Cho] The major shareholder of Rose Town Motors, a U.S. electric truck startup facing closure, recently sold most of its shares.

On the 9th (local time), The Wall Street Journal (WSJ) reported that Workhorse Group, which holds a 9% stake in Rose Town Motors, sold 11.9 million shares, reducing its stake by three-quarters. The scale of the share sale amounts to $79 million (approximately 90.5 billion KRW).

Workhorse Group, a delivery vehicle manufacturer and an early investor in Rose Town Motors, made this share sale ahead of the scheduled electric truck launch next month.

The company acquired the former General Motors (GM) plant in Ohio in 2019 and began developing electric trucks. Although three years have passed since its establishment, it has yet to release its first electric truck model, the Endurance.

Rose Town Motors disclosed in its quarterly report last March that it is facing closure, stating, "There is significant doubt about our ability to continue as a going concern."

Additionally, short-selling firm Hindenburg Research pointed out in its March report that Rose Town may have inflated pre-orders for its electric pickup trucks, and contrary to Rose Town's claim that truck production could start next month, actual production would take several years.

As doubts about Rose Town Motors' production capacity spread, its stock price has plummeted to one-fifth of its level in February.

Rose Town Motors, listed on the New York Stock Exchange, saw its stock price fall 2.7% following the news of Workhorse Group's share sale before closing near the previous day's level.