The lackluster performance of shares in companies that have combined with special purpose acquisition companies (SPACs) in recent quarters took another hit yesterday when Lordstown Motors reported its first-quarter results.

Lordstown, part of a wave of electric-vehicle companies that raised capital and went public via SPACs, announced lower-than-expected 2021 vehicle production, higher capital expenditures (capex) for the year, and the need to raise more capital. For holders of its equity, the news was a disappointment, as TechCrunch explored after the results dropped.

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Shares of Lordstown are down 14% in pre-market trading after falling in after-hours trading yesterday evening.

But there’s more to the Lordstown mess than merely a single bad quarter. What the company reported is somewhat contradicted by its SPAC deck, a document that every startup combining with a blank-check company releases. They are often cheery and full of good news. With just a little capital, the company in question is going to scale rapidly in the coming years, with improving profitability to boot.

Then the deal is sold, capital is raised, entities combine, and the startup in question becomes public, with earnings calls commencing on a quarterly cadence. That’s where the rubber meets the road.

Lordstown’s earnings mess and the resulting dissonance with its own predictions are notable on their own, but they also point to what could be shifting sentiment regarding SPAC combinations. Returns are lackluster, the SEC is worried about too-rosy forecasts and Congress is looking into the boom.

We’re taking a look into Lordstown’s results this morning, but don’t think that we’re only singling out one company; others fit the bill, and more will in time.

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