Electric vehicle startup Lordstown Motors’ shares fell as much as 12.5% ​​in intraday trading Thursday after the company confirmed the US Securities and Exchange Commission requested information on claims from a short seller that misled investors.

Hindenburg Research in a report last week accused Lordstown of using “false” orders to raise funds for its first product, an all-electric pickup truck called Endurance. The short seller claimed the pickup was years away from production, but Lordstown claims it is on track to produce the vehicle in September.

Morgan Stanley cut its price target on Lordstown from $ 18 per share to $ 12 in an investor note on Thursday afternoon. The analyst Adam Jonas cited an increased forecast for spending as the reason for the reduction. He reiterated the company’s underweight position on its stock.

Lordstown CEO Steve Burns declined to comment on the SEC investigation at CNBC on Thursday morning. He told investors during the company’s first public announcement on Wednesday that it was “working” with federal officials.

Burns said Thursday that the company’s high-profile pre-orders of more than 100,000 pickups – a primary target of the Hindenburg report – were merely meant to gauge customer interest and not confirm future sales. The company previously classified the pre-orders as “non-binding production reservations,” but Burns has also described them as “very serious orders”.

“We were always very clear about each other, right? These are exactly who they are intended for. These are non-binding letters of intent. They are known as pre-orders in the real world,” he told CNBC on Thursday. Squawk box. “He later added,” I don’t think anyone thought we had actual orders, right? That’s just not the nature of this business. “

Since Hindenburg released the report on Friday, Lordstown’s shares have fallen roughly 24%. The stock fell about 12% in intraday trading on Thursday afternoon. The company’s market capitalization is $ 2.2 billion.

The company also raised its forecast of capital and operating costs for this year on Wednesday, mainly citing decisions to accelerate development of its second product (a delivery truck) and increase in-house production.

Lordstown went public in October through a special purpose vehicle (SPAC). It is one of a growing group of electric vehicle startups going public through contracts with SPACs. These are a popular way to raise money on Wall Street as they have a tighter regulatory process than traditional IPOs.

Hindenburg’s report on Lordstown comes about six months after posting a damning report on another EV-SPAC startup, Nikola. That report also led to federal investigations and the resignation of company founder and chairman Trevor Milton.

Short selling is when investors, mostly professional hedge fund managers, borrow and sell shares in a stock from a broker in hopes of buying them back cheaper. If the stock falls, investors make a profit on the difference when they return the stock to the broker.

– CNBC’s Michael Bloom contributed to this report.