Trading News
Jun. 19, 20233 min read

Why Is Lordstown Motors (RIDE) Stock Up Today — June 16?

Tim BohenAvatar
Written by Tim Bohen

Hey traders, let’s dive into today’s action with Lordstown Motors (NASDAQ: RIDE). This EV player spiked over 60% from yesterday’s close, and it’s still holding strong, up more than 25% since the opening bell!

This price move isn’t happening in a vacuum. We’re seeing a surge in volume with 44 million shares changing hands so far today — that means the 13 million share float has had 3 rotations!

EV Stocks Are on Fire

The EV sector is buzzing, and it’s largely thanks to the Federal Reserve’s decision to pause rate hikes. This has sparked a rally in EV-related stocks, and Lordstown Motors is riding that wave. 

Despite a lack of company-specific news, it’s up 125% in the past week. This surge is all about the rising tide in EV stocks, caused by Tesla’s (NASDAQ: TSLA) recent rise.

RIDE Price Action

Looking at Lordstown’s chart, we’re seeing a strong upward trend over the past week. This upward movement aligns with the broader bullish trend observed in the EV sector. But let’s not forget, over a longer timeframe, this spike is a tiny blip on this stock’s long fade. It’s lost nearly 99% from its 2021 high!

Is RIDE Stock a Buy on June 16?

Here’s what we like: There’s been some tradeable chart action in this stock over the past few days. Even if it fades, chances are there will be some bounces on the way. The company’s stock float has been significantly reduced due to a 1-for-15 reverse stock split. While this move was intended to maintain compliance with Nasdaq’s minimum listing requirements, it also means that less volume is needed to move the stock price, making it more volatile.

For traders, volatility is a good thing. And a small float of 13 million shares is a very good thing.

Here’s what we don’t like: Reverse splits are often a sign that a company is in trouble and can’t get its stock price up based on real value. This consolidation of every 15 shares of RIDE stock into a single share has increased the price of its stock without directly affecting its market capitalization or shareholders’ stakes in the company.

In the long-term, RIDE has been in a consistent downtrend. Nothing material has changed about this stock, even with the 125% run this stock has gone on this week.

Whether RIDE is a buy or not depends on your individual trading strategy and goals. Remember, trading isn’t about hot picks, it’s about planning and execution. Have a trading plan, and follow it!

Tim Bohen has no position in any of the stocks mentioned. StocksToTrade.com has a disclaimer.