Why Lordstown Stock Is Hitting Top Gear Today

Lordstown Motor Corp. RIDE shares are advancing strongly in premarket trading on Tuesday.

What Happened: The maker of electric vehicles, primarily for fleets, said Apple Inc.'s AAPL iPhone supplier Hon Hai Precision Manufacturing Company Limited HNHPF has agreed to invest up to $170 million in the company.

The investment will be in the form of a subscription to $70 million worth of Class A stock of Lordstown and up to $100 million of newly-created Series A convertible preferred stock.

See Also: Best Electric Vehicle Stocks 

Following the completion of the transaction, Hon Hai, commonly called Foxconn, will hold all of Lordstown’s preferred stock and 18.3% of its common stock on a pro forma basis.

The Taiwanese company also gets the right to designate two members to Lordstown’s board.

The proceeds will be used for a new EV program in collaboration with Foxconn. The closing of the transaction is expected on or about Nov. 22.

Price Action: In premarket trading on Tuesday, Lordstown shares were rallying 10.81% to $2.05, according to Benzinga Pro data.