Shares of electric vehicle startup Electric Last Mile plunge more than 50% after CEO and chairman leave

Launching later this year, the ELMS Urban Delivery is expected to be the first Class 1 commercial electric vehicle available in the US market and will be manufactured at the company’s Mishawaka, Indiana facility.

Last Mile Electrical Solutions

Shares of Electric Last Mile Solutions fell more than 50% on Wednesday after the chairman and CEO of the electric vehicle startup unexpectedly stepped down.

Company Late Tuesday said ELMS CEO James Taylor and Chairman Jason Luo resigned from their positions, effective immediately, following an internal investigation into the share purchase by the co-founders before it went public through a special acquisition company in June.

The dispute is the latest for electric vehicle startups that have gone public through SPAC deals. Other issues have led to similar executive forays, as well as investigations by the Department of Justice and the Securities and Exchange Commission.

ELMS shares fell 53% during intraday trading on Wednesday before closing at $2.71 a share, down 51.5%.

ELMS said an internal investigation by a special committee of the board of directors found that shortly before the company announced its December 2020 share opening agreement, some executives, including Taylor and Luo, purchased shares at significant discounts from with a market value without an independent appraisal.

On Wednesday, several stock analysts downgraded the stock, including Cowen’s Jeffrey Osborne and DA Davidson & Co’s Michael Schlisky. Both cited the loss of experienced executives rather than any internal issues within the company for the downgrade.

ELMS declined to comment on the details of the investigation beyond its press release and public statement to the SEC.

According to the announcement, Taylor and Luo will continue to advise ELM.

Board member Shona McIntyre, a former head of Google’s consumer electronics division, has been named interim CEO. Brian Krzanich, former CEO of automotive retail software provider CDK Global, has been named chairman.

– CNBC Michael Bloom contributed to this report.

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