On Tuesday, February 1, 2022, Electric Last Mile Solutions Inc, (NASDAQ: ELMS) disclosed that its CEO and President James Taylor, and Executive Chairman of the board Jason Luo had both resigned following the findings of an investigation conducted by a Special Committee.
Following this news, Electric Last Mile Solutions stock price dropped as much as 52% on Wednesday, February 2, 2022, causing significant harm to investors.
Why is ELMS Stock Dropping?
On Tuesday, February 1, 2022, news dropped that both the ELMS CEO and President James Taylor and Chairman of the board Jason Luo would be resigning following the conclusion of an investigation by a Special Committee. According to Motley Fool, both Taylor and Luo bought equity in the company at considerable discounts to market value, without attaining an independent valuation. This occurred just prior to the company’s decision to reverse-merge into the Forum Merger III Corporation SPAC, the incident that allowed Electric Last Mile to carry off a de facto IPO.
The commercial electric vehicle solutions company went on to state that “On the basis of the Special Committee investigation, the board concluded that the company’s previously issued consolidated financial statements [as far back as fiscal 2020] should be restated and, therefore, should no longer be relied upon.”
Following this news, Electric Last Mile Solutions’ stock price plummeted by as much as 52% on February 2, 2022, causing significant harm to investors.
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