The Taiwanese multinational bets on RIDE shares with a purchase of 170 million dollars

The Taiwanese multinational bets on RIDE shares with a purchase of 170 million dollars
An image of former US President Donald Trump in front of a Lordstown EV
Former US President Donald Trump (centre) seems to like Lordstown’s electric vehicles – Photo: Getty Images.

Taiwanese manufacturer Foxconn (HNHPF) has made his bet and bet heavily on Lordstown Motors (RIDE) Values. Foxconn announced on Monday that it will invest $170m (£148m) and buy ordinary shares and some newly created shares in the electric vehicle company. RIDE.

RIDE Shares fell 4% yesterday, but the US electric vehicle company, based in Ohio, has seen its share price rise 11% in the past four weeks. HNHPF However, the share price has fared less well and, over the same period, is down almost 2%. And it’s down 25% this year.

yesor, Will Lordstown Motors RIDE into the twilight after this latest capital injection and how will this move affect Foxconn’s share price in the long run?

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Lordstown Engines (RIDE) stock price chart

RIDE towards the sunset

Once the deal is complete, Foxconn is reported to hold all of RIDE’s outstanding preferred shares and 18.3% of the group’s common shares. The capital increase will also allow Foxconn the right to have two seats on the RIDE meeting.

But this is not the first time that Foxconn, also known as Hon Hai Precision Industry Co and is listed under the ticker HNHPFhas done business with RIDE.

HNHPF bought a 6.2 million square foot factory, based in Ohio, from RIDE last year. The deal also meant that HNHPF would help RIDE manufacturing its endurance truck, which began in September 2022.

Daniel Ninivaggi, CEO of RIDE said: “Since announcing our first transaction with Foxconn over a year ago, our goal has been to develop a broad strategic partnership that leverages the capabilities of both companies. Foxconn’s latest investment is another step in that direction.”

“Our Board of Directors and management team strongly believe that deep collaboration with the Foxconn EV ecosystem, including the open source Mobility-in-Harmony (MIH) platform, offers tremendous opportunities to deliver on our mutual ambition to accelerate the adoption of EV worldwide. I look forward to welcoming Foxconn representatives to our Board and exploring other ways to deepen our partnership.”

RIDE, which will announce its third-quarter earnings today before US markets open, has seen its share price rise recently. This may be due to the fact that RIDE He provided the popular car magazine Car and Driver with some Endurance trucks to test on the road, and the strategy worked. Car and Driver said that while the truck needs some tweaking, it “is getting close to being ready for fleet truck use.”

The Endurance has a range of 200 miles and is a light-duty commercial fleet truck. So it looks like Endurance has received the auto magazine’s stamp of approval, and investors are riding the wave of optimism this recommendation has brought.

With that said, RIDE, is stuck between a rock and a hard place right now, trying to find its place in the competitive electric vehicle market and competing with the likes of Tesla (TSLA) Polar Star (PSNY) and lucid (LUIDO), it has not been easy for the EV startup. RIDE It’s also burning through a lot of cash right now, so it seems like this injection of capital from Foxconn has come at the right time.

Tesla (TSLA) stock price chart

But what about Foxconn? How will this stock perform now that you are investing in RIDE?

Well, Foxconn (HNHPF), which is best known for making Apple (AAPL) iPhone has said this cash injection will help finance the development and design of a new electric vehicle program.

However, rumors of an iPhone production halt began to surface in the summer and now those rumors have become official, as Apple (AAPL) announced on Monday: “We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than previously anticipated and customers will experience longer wait times to receive their new products.”

“COVID-19 restrictions have temporarily impacted the iPhone 14 Pro and iPhone 14 Pro Max main assembly facility located in Zhengzhou, China. The facility is currently operating at a significantly reduced capacity.”

the The Zhengzhou campus, owned by Foxconn and known as the iPhone city, employs 200,000 people. Foxconn is looking to make up the shortfall before the holiday season arrives, but the outlook looks very bleak.

Foxconn produces 70% of the iPhones in the world and builds the device in India.

“Apple’s admission that shipments of the new iPhone 14 could be affected by COVID-imposed downtime at a plant owned by key supplier Foxconn in China offers the latest test of faith for the tech giant’s shareholders,” the report reads. AJ Bell’s chief investment officer, Russ Mold. in a note

but it’s not just AAPL As investors may lose faith, Foxconn’s failure to deliver on its promises could also hamper stock performance and means that even its last company with RIDE you may not be able to help your stock price running low.

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