Month: September 2021

Abortion Ban Stimulates Interstate Travel, Says Texas


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The federal government can’t sue over a near-total ban on abortion in Texas because it “is stimulating rather than obstructing interstate travel,” the state argues. In a motion to dismiss the U.S. Department of Justice (DOJ) lawsuit against it, Texas suggests that legal precedent cited by the DOJ only lets the government sue when “interstate commerce was obstructed by a denial of civil rights.”

“One of the precedents that applies here is a case where the US was able to get an injunction against striking workers, partly because it was impacting interstate commerce,” explains Jacqueline Thomsen of the National Law Journal on Twitter. “Texas argues this doesn’t involve the same issue so the precedent doesn’t work.”

“In this case, the federal government does not bring a commerce claim, nor does it cite any actual evidence that the Texas Heartbeat Act burdens interstate commerce,” states the Texas motion, filed September 29. “What evidence that does exist in the record suggests that, if anything, the Act is stimulating rather than obstructing interstate travel,” it says, noting an “increase in Texas women traveling to Oklahoma” to terminate their pregnancies.

So, the state admits that its “pro-life” law isn’t actually stopping Texas women from getting abortions, just driving them across state lines—that is, not “saving babies,” as supporters claim, but simply making women getting abortions jump through hoops.

Texas also argues that the federal government hasn’t specified a cause of action, lacks jurisdiction, and “has not clearly shown that the Texas Heartbeat Act is unconstitutional.” It says that for the law to be challenged, it must be done by private citizens in state court. You can read the state’s full argument here.

The Volokh Conspiracy has a multi-part series analyzing constitutional challenges to the Texas law (Senate Bill 8), which also lets abortion doctors and anyone who “aids and abets” an abortion be sued. It has already spawned a couple of lawsuits. See:

FREE MARKETS

“We have an agreement on the C.R.—the continuing resolution to prevent a government shutdown—and we should be voting on that tomorrow morning,” said Senate Majority Leader Chuck Schumer (D–N.Y.) yesterday. The Senate “can approve this measure quickly, and send it to the House so it can reach the President’s desk before funding expires midnight tomorrow.”

Government shutdown starts today if Congress can’t get it together enough to vote against it. For that to happen, it looks like everyone will have to agree to Republicans’ preferred version of a stopgap funding bill. From CNN:

The effort to prevent a shutdown has in recent days been caught up in a fight over how to address a looming debt limit crisis. Democrats initially attempted to pair the two fiscal issues—the debt limit and government funding—and pass legislation that would resolve both, but that ran aground in the Senate due to GOP opposition.

Republicans have said they would support a “clean” stopgap funding bill that does not include a debt limit provision, arguing that Democrats must address the debt limit on their own without GOP votes. Democrats have pushed back, saying that addressing the debt limit is a shared bipartisan responsibility.

In the face of GOP opposition to combining the two issues, Congress now appears poised to pass a “clean” funding bill without the debt limit attached. Schumer said Wednesday that once they fund the government, Congress still needs to “address the urgent matter of extending the debt ceiling.”

FREE MINDS

Demographic diversity in rural America. It’s on the rise, according to the latest U.S. census. “The future of rural America is increasingly marked by growing diversity and expanding inequity within and across regions—creating an intricate picture that binary thinking can’t capture,” Brookings Institution researchers write. They note that rural parts of the country have gotten more racially and ethnically diverse, and that “the distribution of people of color in rural America is complex and highly regionalized”:

Contrary to the dominant narratives that use “rural” as a synonym for “white,” 24% of rural Americans were people of color in 2020. While rural America is still less diverse than the nation as a whole (42.2% people of color), it is diversifying as well: The median rural county saw its population of color increase by 3.5 percentage points between 2010 and 2020….

The makeup of rural populations of color is shaped by highly regionalized variations in the concentration of Black Americans, Latino Americans, and Indigenous Americans across the nation. As Figure 2 demonstrates, rural counties in the South and West are particularly racially and ethnically diverse—with a substantial number of rural areas in these regions majority or near-majority people of color.

More maps and data here.

QUICK HITS

• The U.S. mail is about to get slower and more expensive.

• “New psychological research suggests that trigger warnings do not reduce negative reactions to disturbing material—and may even increase them,” reports The New Yorker.

• The former London police officer who abducted, raped, and murdered Sarah Everard was sentenced to life in prison.

• YouTube is blocking anti-vaccine content.

• Check out the Mexican town built by 3D printers.

• Former President Donald Trump lost his lawsuit against Omarosa.

• Come work at Reason:

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Abortion Ban Stimulates Interstate Travel, Says Texas


zumaamericasthirtytwo250138

The federal government can’t sue over a near-total ban on abortion in Texas because it “is stimulating rather than obstructing interstate travel,” the state argues. In a motion to dismiss the U.S. Department of Justice (DOJ) lawsuit against it, Texas suggests that legal precedent cited by the DOJ only lets the government sue when “interstate commerce was obstructed by a denial of civil rights.”

“One of the precedents that applies here is a case where the US was able to get an injunction against striking workers, partly because it was impacting interstate commerce,” explains Jacqueline Thomsen of the National Law Journal on Twitter. “Texas argues this doesn’t involve the same issue so the precedent doesn’t work.”

“In this case, the federal government does not bring a commerce claim, nor does it cite any actual evidence that the Texas Heartbeat Act burdens interstate commerce,” states the Texas motion, filed September 29. “What evidence that does exist in the record suggests that, if anything, the Act is stimulating rather than obstructing interstate travel,” it says, noting an “increase in Texas women traveling to Oklahoma” to terminate their pregnancies.

So, the state admits that its “pro-life” law isn’t actually stopping Texas women from getting abortions, just driving them across state lines—that is, not “saving babies,” as supporters claim, but simply making women getting abortions jump through hoops.

Texas also argues that the federal government hasn’t specified a cause of action, lacks jurisdiction, and “has not clearly shown that the Texas Heartbeat Act is unconstitutional.” It says that for the law to be challenged, it must be done by private citizens in state court. You can read the state’s full argument here.

The Volokh Conspiracy has a multi-part series analyzing constitutional challenges to the Texas law (Senate Bill 8), which also lets abortion doctors and anyone who “aids and abets” an abortion be sued. It has already spawned a couple of lawsuits. See:

FREE MARKETS

“We have an agreement on the C.R.—the continuing resolution to prevent a government shutdown—and we should be voting on that tomorrow morning,” said Senate Majority Leader Chuck Schumer (D–N.Y.) yesterday. The Senate “can approve this measure quickly, and send it to the House so it can reach the President’s desk before funding expires midnight tomorrow.”

Government shutdown starts today if Congress can’t get it together enough to vote against it. For that to happen, it looks like everyone will have to agree to Republicans’ preferred version of a stopgap funding bill. From CNN:

The effort to prevent a shutdown has in recent days been caught up in a fight over how to address a looming debt limit crisis. Democrats initially attempted to pair the two fiscal issues—the debt limit and government funding—and pass legislation that would resolve both, but that ran aground in the Senate due to GOP opposition.

Republicans have said they would support a “clean” stopgap funding bill that does not include a debt limit provision, arguing that Democrats must address the debt limit on their own without GOP votes. Democrats have pushed back, saying that addressing the debt limit is a shared bipartisan responsibility.

In the face of GOP opposition to combining the two issues, Congress now appears poised to pass a “clean” funding bill without the debt limit attached. Schumer said Wednesday that once they fund the government, Congress still needs to “address the urgent matter of extending the debt ceiling.”

FREE MINDS

Demographic diversity in rural America. It’s on the rise, according to the latest U.S. census. “The future of rural America is increasingly marked by growing diversity and expanding inequity within and across regions—creating an intricate picture that binary thinking can’t capture,” Brookings Institution researchers write. They note that rural parts of the country have gotten more racially and ethnically diverse, and that “the distribution of people of color in rural America is complex and highly regionalized”:

Contrary to the dominant narratives that use “rural” as a synonym for “white,” 24% of rural Americans were people of color in 2020. While rural America is still less diverse than the nation as a whole (42.2% people of color), it is diversifying as well: The median rural county saw its population of color increase by 3.5 percentage points between 2010 and 2020….

The makeup of rural populations of color is shaped by highly regionalized variations in the concentration of Black Americans, Latino Americans, and Indigenous Americans across the nation. As Figure 2 demonstrates, rural counties in the South and West are particularly racially and ethnically diverse—with a substantial number of rural areas in these regions majority or near-majority people of color.

More maps and data here.

QUICK HITS

• The U.S. mail is about to get slower and more expensive.

• “New psychological research suggests that trigger warnings do not reduce negative reactions to disturbing material—and may even increase them,” reports The New Yorker.

• The former London police officer who abducted, raped, and murdered Sarah Everard was sentenced to life in prison.

• YouTube is blocking anti-vaccine content.

• Check out the Mexican town built by 3D printers.

• Former President Donald Trump lost his lawsuit against Omarosa.

• Come work at Reason:

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Surprise! Study Finds ‘Paying People To Stay Home & Not Work’ Does Not Encourage Employment

Surprise! Study Finds ‘Paying People To Stay Home & Not Work’ Does Not Encourage Employment

Via SchiffGold.com,

Incentives matter. All of the political grandstanding, media spin and wishful thinking won’t change this basic economic principle.

Both Janet Yellen and Joe Biden insisted “enhanced” unemployment benefits weren’t incentivizing people not to work. But as we recently reported, analysis of continuing unemployment claims after a number of red states cut enhanced benefits undermined this narrative. Now a study by Mercatus Center economists Michael Farren and Christopher M. Kaiser further destroys the ludicrous notion that paying people not to work won’t result in fewer people working.

In a nutshell, according to the study, states that ended participation in enhanced federal benefits early saw two times the job growth compared with states that kept the program in place.

Our preliminary results agree with the findings of previous research: the parameter estimates show that higher UI benefits tend to discourage employment, whereas the end of UI eligibility appears to motivate more workers to become employed. “

In their paper, Farren and Kaiser begin by explaining the incentivizing effect of enhanced unemployment benefits.

The concern that the federal expansions to UI reduce the likelihood that workers will return to employment is based on the understanding that unconditional monetary grants to unemployed workers tend to raise their reservation wage – the compensation level necessary for the worker to take a job. UI programs are typically designed to mitigate this potential effect by replacing only a portion of workers’ preunemployment income (up to some income limit). However, the additional weekly benefits provided by FPUC (as well as the American Rescue Plan’s exemption of $10,200 of UI benefits from federal income tax) means that many low-wage workers saw no decrease in their weekly income (and some even saw an increase).”

Farren and Kaiser also outline a number of empirical studies that support this conclusion. As just one example, economists Johannes F. Schmieder and Till von Watcher reviewed 13 studies examining the effect of benefit increases on unemployment duration. They found that all 13 studies connected increased UI benefits with longer unemployment durations.

Additionally, they cite other studies that indicate enhanced benefits increased the length of unemployment. For instance, University of Wisconsin professor Noah Williams found that the states that ended federally enhanced unemployment benefits before the federal deadline showed improved labor market outcomes compared to those that continued their participation in the expanded UI programs.

In conclusion, Farren and Kaiser wrote:

Some pundits seem to have rushed to the defense of federally expanded UI programs when the July jobs report was released, arguing that there was no evidence that the programs discouraged employment. But this perspective cannot be reconciled with decades of labor market research. Furthermore, even research that has been framed as proof that the federal expansion to UI had no employment-discouraging effect itself acknowledges that workers were 20 percent more likely to accept jobs in states that had opted out.”

Tyler Durden
Thu, 09/30/2021 – 09:26

via ZeroHedge News https://ift.tt/3F5pnsR Tyler Durden

USGS Warns Hawaii’s Kilauea Volcano Erupting In “Full Swing”

USGS Warns Hawaii’s Kilauea Volcano Erupting In “Full Swing”

The U.S. Geological Survey (USGS) confirmed that Hawaii’s Kīlauea volcano began erupting Wednesday after a swarm of earthquakes. 

Kīlauea is one of the most active volcanos on Earth and “was once a cooling lava lake is now a new fissure eruption,” USGS Volcanoes tweeted. 

USGS detected the eruption around 1520 local time at Kīlauea’s summit crater. The agency raised the volcano’s alert system “WATCH” to “WARNING” and its aviation color code from “ORANGE” to “RED” by evening.

“All signs indicate that it will stay within the crater,” Ken Hon, the top USGS volcanologists at Hawaii Volcano Observatory, told ABC. “We’re not seeing any indications that lava is moving into the lower part of the east rift zone where people live. Currently, all the activity is within the park.”

According to the USGS website, the latest alert level suggests an eruption is “imminent, underway or suspected,” according to the USGS website. 

Kīlauea’s most recent eruption was around December of last year. Residents in the area were asked to remain indoors to avoid toxic gasses and ash clouds. A few years before that, in 2018, another eruption was more powerful and destroyed hundreds of homes and forced many residents to evacuate.  

Volcanologists still don’t know if magma has filled reservoirs within Kīlauea, which would repressurize the volcano and result in a much larger eruption.

Tyler Durden
Thu, 09/30/2021 – 09:06

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Q2 GDP Revised Slightly Higher As Core Inflation Rises The Most Since 1983

Q2 GDP Revised Slightly Higher As Core Inflation Rises The Most Since 1983

There was little surprise in today’s third and final revision of Q2 GDP data, which came in just barely above consensus expectations, rising from 6.6% (or rather 6.560%) in the second estimate to 6.7% (6.720% to be precise), which was also higher than the 6.6% consensus. The number, while also higher than the 6.3% reported in Q1 will be the best US GDP print for a long, long time, with many expectations a sharp decline in GDP in the current and certainly future quarters if Biden is unable to pass his full $3.5 trillion stimulus which now appears to be the case.

In its snapshot assessment, the BEA reports that “in the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined. In the first quarter of 2021, real GDP increased 6.3 percent.”

Looking at the details, the revision to GDP reflected upward revisions to consumer spending, exports, and inventory investment that were partly offset by an upward revision to imports.

  • Real disposable personal income (DPI)—personal income adjusted for taxes and inflation—decreased 30.2 percent in the second quarter, an upward revision of 0.8 percentage point from the second estimate.
  • The decrease in current-dollar DPI primarily reflected a decrease in government social benefits related to pandemic relief programs, notably direct economic impact payments to households established by the Coronavirus Response and Relief Supplemental
  • Appropriations Act and the American Rescue Plan Act. Personal saving as a percent of DPI was 10.5 percent in the second quarter, compared with 20.5 percent in the first quarter

Broken down by component, we see the following changes from the second GDP estimate last month:

  • Personal Consumption contributed 7.92% of the bottom-line GDP print, or some 118%. This was entirely as a result of the spending boost from the latest fiscal stimulus earlier this summer.
  • Fixed Investment dipped from 0.63% to 0.61% in the final estimate. Nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 9.2% in 2Q after rising 12.9% prior quarter
  • A decline in private Inventories subtracted 1.26% from the GDP number, slightly below last month’s estimate of -1.30%
  • Net trade was a slightly smaller detractor to growth, with Exports rising from 0.70% to 0.80% while Imports also grew from -0.94% (remember, Imports subtract from GDP) to -0.99%.
  • Finally government subtracted another -0.36% from the GDP number, slightly higher than the -0.33% last month.

Visually:

Of course, since these numbers reflect what happened in the ancient second quarter, they are completely irrelevant for an economy that is now rapidly sliding into stagflation.

The latest GDP report also had new disclosure on corporate profits which rose 5.1% in prior quarter, the BEA said. Y/Y corporate profits rose 45.1% in 2Q after rising 17.6% prior quarter, while financial industry profits increased 10.9% Q/q in 2Q after rising 0.3% prior quarter. At the same time, Federal Reserve bank profits surged 36.4% in 2Q after falling 11.1% prior quarter while nonfinancial sector profits rose 13.8% Q/q in 2Q after rising 9.1% prior quarter.

Finally, looking at the inflation components, the price index rose 6.1% in 2Q after rising 4.3% prior quarter while the Core PCE rose 6.1% in 2Q, unchanged from the previous estimate, after rising 2.7% prior quarter. This was the highest core inflation print since 1983 although we know that according to real-time indicators, even higher inflation prints are coming.

Tyler Durden
Thu, 09/30/2021 – 08:52

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Delta Urges Airlines To Share Their “No Fly List” Of Problematic Passengers To Protect Airline Employees

Delta Urges Airlines To Share Their “No Fly List” Of Problematic Passengers To Protect Airline Employees

Authored by Katabella Roberts via The Epoch Times,

Delta has called on other airlines to share their “no fly” lists of problematic passengers who have been banned, in an effort to protect airline employees.

The airline sent two internal memos to staff as a “reminder of Delta’s commitment to creating a culture of safety for every employee” in response to recent  incidents involving “unruly passengers.”

“At Delta, we now have more than 1,600 people on our ‘no fly’ list, and we’ve submitted more than 600 banned names to the FAA in 2021 as part of their Special Emphasis Enforcement Program,” Delta said in a statement on Thursday.

“We’ve also asked other airlines to share their ‘no fly’ list to further protect airline employees across the industry—something we know is top of mind for employees as well. A list of banned customers doesn’t work as well if that customer can fly with another airline.”

The memos, sent by Kristen Manion Taylor, S.V.P.—InFlight Service, and Eric Phillips, S.V.P.—ACS and Cargo Operations, came on the same day that the U.S. House of Representatives Committee on Transportation & Infrastructure held a hearing titled, “Disruption in the Skies: The Surge in Air Rage and its Effects on Workers, Airlines, and Airports.”

Delivering opening remarks at the hearing, Subcommittee on Aviation Ranking Member Garret Graves (R-La.) said there have been 4,284 complaints of unruly passengers as of Sept. 14, although more than 350 million passengers have flown so far this year so that figure represents 0.001 percent.

According to the Federal Aviation Administration (FAA), that figure stands at 4,385, with 3,199 of those reports relating to passengers refusing to wear a mask. Meanwhile, the agency says it has initiated 789 investigations against unruly passengers.

However, Graves noted that there has been an increase in “unruly behavior” from some passengers overall, including cases where airline employees and flight attendants have been intimidated, abused, or assaulted.

“The FAA is correct for aggressively enforcing the rules and regulations that are applicable to air travel and for holding people accountable for failing to comply, and that unruly and illegal behavior shall not be tolerated—period,” Graves said.

Delta said Airlines for America, which represents the company, also called for federal agencies and authorities to take stronger actions regarding problematic passengers.

The airline also said it had expanded its Peer Support teams, Mental Health Coaching to help employees who have been affected by incidents relating to problematic passengers.

As part of the FAA‘s Reauthorisation Bill (pdf), the FAA can propose up to $37,000 per violation for unruly passenger cases. Previously, the maximum civil penalty per violation was $25,000.

Tyler Durden
Thu, 09/30/2021 – 08:45

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Initial Jobless Claims Unexpectedly Jump To Worst In 7 Weeks

Initial Jobless Claims Unexpectedly Jump To Worst In 7 Weeks

After unexpectedly jumping to five-week highs last week, analysts expected initial jobless claims to return to a decline once again this week. They were wrong as the number of Americans applying for unemployment benefits for the first time jumped to 362k (from 351k), significantly worse than the 330k expected.

Source: Bloomberg

That is the highest number of initial claims in seven weeks.

Continuing claims were flatish from the prior month’s revision but also worse than expected at 2.802mm.

The reason we are seeing initial claims jump and continuing claims stall is perhaps evidenced in the chart below as the total number of Americans on some form of dole collapsed last week (from around 12mm to around 5mm) as Pandemic aid was shut off…

Source: Bloomberg

Will this mean Americans will start applying for the millions of jobs that are out there? Or are they banking on another round of extended handouts from the Democrats?

Tyler Durden
Thu, 09/30/2021 – 08:37

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The Inaugural Episode of “A Seat at the Sitting”—The Supreme Court’s October Sitting in 90 Minutes or Less


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You almost certainly know about the abortion and gun cases before the Supreme Court this term, but do you want to know more about the other cases the justices will be considering this term? Did you even know that there is yet another abortion case? Or that the justices will be considering cases with important implications for national security, criminal justice, and the environment? Well, I might have the program for you.

Today at 2pm Eastern, I will be participating in the inaugural episode of the Federalist Society’s “A Seat at the Sitting” teleforum with Sarah Harris and Kate Comerford Todd. During this program, we will briefly survey the cases before the justices during the October sitting, which involve the state secrets privilege, the Boston Marathon bomber, AEDPA, the Armed Career Criminal Act, and the authority of state Attorneys General to defend state statutes.

The bottom line is there is more to this Supreme Court term than Dobbs and the New York gun case, and this new series will help you keep up to date on what else the Supreme Court is considering.

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Bed, Bloodbath And Beyond: BBBY Crashes After Missing Wildly; Slashes Revenue, EBITDA And EPS Forecasts

Bed, Bloodbath And Beyond: BBBY Crashes After Missing Wildly; Slashes Revenue, EBITDA And EPS Forecasts

Having spent much of the summer warning that as a result of surging labor costs, commodity prices and generally “transitory hyperinflation”, corporate margins would tumble (which in the view of Morgan Stanley would lead to a 20% market drop), almost one month ago we warned that we are about to see a surge in profit warnings as the realization that the current unprecedented ascent in prices is going to be anything but transitory.

Sure enough, shortly after we noted that “Profit Warnings Are Coming Fast And Furious As Q3 Profits Brace For Big Hit” it wasn’t until Nike and FedEx’s dismal outlooks that the world finally paid attention to the coming stagflationary wave.

Today we got another high profile admission that the non-transitory stagflationary environment is here to stay when retailer Bed Bath & Beyond crashed over 15% in premarket trading after slashing its full year forecasts for net sales, adjusted Ebitda and EPS. Its third quarter EPS and net sales forecasts also missed the average analyst estimates.

But before we get there, first a look at the just concluded quarter which was just as ugly and confirms that US consumers were already hunkering down in the current quarter amid a shortage of stimmies and the mass media-induced Delta variant panic:

  • Adjusted EPS 4c, missing estimates of 52c, far below the lowest end of the range which was 48c to 56c
  • Net sales $1.99 billion, missing estimates of $2.06 billion (range $2.04 billion to $2.08 billion)
  • Adjusted gross margin 34%, missing estimates of 35.6%
  • Adjusted Ebitda $85 million, badly missing the estimates $156.2 million (range $150.0 million to $162.0 million)
  • Comparable sales -1%; Bed Bath & Beyond Banner comparable sales -4%

But it was the company’s forecast that was especially ugly, first the third quarter, where it now sees:

  • Adjusted EPS $0 to 5c, estimate 28c (range 18c to 40c) (Bloomberg Consensus)
  • Net sales $1.96 billion to $2 billion, estimate $2.02 billion (range $1.88 billion to $2.19 billion)
  • Adjusted Ebitda $80 million to $85 million, estimate $117.6 million (range $102.0 million to $136.0 million)
  • Adjusted gross margin 34% to 35%, estimate 35.4%

And then the full year:

  • Sees net sales $8.1 billion to $8.3 billion, saw $8.2 billion to $8.4 billion, estimate $8.30 billion (range $8.22 billion to $8.40 billion)
  • Adjusted EPS 70c to $1.10, saw $1.40 to $1.55, estimate $1.52 (range $1.41 to $1.62)
  • Adjusted Ebitda $425 million to $465 million, saw $520.0 million to $540.0 million, estimate $530.3 million (range $521.0 million to $538.0 million)
  • Sees adjusted gross margin 34% to 35%, saw about 35%

CEO Mark Tritton was laconic: “Following solid growth in June, we saw unexpected, external disruptive forces towards the end of the quarter that impacted our income.”

The delta between the market’s rosy expectations and the reality was about 15% because that’s how big the drop in BBBY stock was premarket.

Tyler Durden
Thu, 09/30/2021 – 08:24

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Lordstown Motors To Reportedly Sell Ohio Plant To Foxconn

Lordstown Motors To Reportedly Sell Ohio Plant To Foxconn

Taiwan’s Foxconn Technology Group, the world’s largest electronics manufacturer, is nearing a deal to purchase the electric truck startup Lordstown Motors Corp.’s Ohio plant, according to Bloomberg. The deal could be announced by the end of the week. 

Sources familiar with the matter told Bloomberg that the electric truck maker was running low on cash. There was no mention of how much the deal was worth. Lordstown purchased the factory from General Motors in 2019. Bloomberg reports that the sale proceeds could propel the startup to strengthen its balance sheet and benefit from the large-scale manufacturing of its truck with Foxconn. Though we fail to see how the ‘math’ pencils out that selling the factory to the partner you are already manufacturing with will ‘enable scale’? Is this shenanigans to bolster Lordstown’s liquidity (on paper) as Foxconn recognizes its investment in this startup carmaker is at risk?

Lordstown Motors shares jumped as much as 8% to $7.98 during premarket trading. The company has lost 75% of its market value in the last three quarters. 

The steep loss in market value is due to Hindenburg Research which accused the electric car startup of faking preorders. Hindenburg is best known for calling Nikola an “intricate fraud,” which led to the departure of the company’s founder and eventual probes by several regulatory bodies. This is eventually what happened to Lordstown by early summer when CEO Steve Burns and CFO Julio Rodriguez resigned. The Department of Justice has since been probing the company for false and misleading statements to investors. 

As a reminder, the potential sale of the Lordstown factory comes after Foxconn bailed on a $10 billion factory in Wisconsin, which was supposed to employ 13,000 workers… so take this report with the pinch of salt it deserves.

Tyler Durden
Thu, 09/30/2021 – 08:20

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