Lordstown stock drops toward record low after declaring 1-for-15 reverse stock split

Shares of Lordstown Motors Corp.
RIDE,
-4.33%
tumbled 13.0% toward a record low in premarket trading Tuesday, after the electric vehicle maker declared a 1-for-15 reverse stock split. The split will be effective May 24. The split will cause each 15 shares of the company’s outstanding Class A common stock to be combined into one share of Class A stock, effectively multiplying the stock price by 15. “The reverse stock split is intended to improve the marketability and liquidity of the Class A common stock,” the company said in a statement. “A higher market price can make the Class A common stock more attractive to a broader range of institutional investors, professional investors, and other members of the investing public.” The stock has closed below the $1 level since March 7, and closed at a record low of 27 cents on May 19. It has plummeted 73.7% year to date through Monday, while the Global X Autonomous & Electric Vehicles exchange-traded fund
DRIV,
-0.67%
has run up 19.7% and the S&P 500
SPX,
-0.32%
has advanced 9.2%.