Fisker’s Future Looks Bleak As Bailout Talks With OEM End, Stock Trading Suspended
EV startup paused production of its Ocean SUV last week and trading in the firm’s shares has been halted after talks with a major automaker – rumored to be Nissan – collapsed
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Electric startup Fisker says the talks it was holding with a major automaker have broken down, leaving the company’s future in doubt. Fisker has been hoping to secure additional funding and other assistance from the OEM, which Reuters named as Nissan, but that door has now closed and there aren’t many left to try.
Shares in Fisker, which slumped even further in recent weeks as the firm revealed it was looking for help and had appointed advisors to prepare for bankruptcy, fell again to just 9 cents on the latest news. But trading in the stock has now been suspended while Fisker readies a statement about its plans.
Neither Fisker or Nissan had officially acknowledged that the Japanese automaker was the suitor Fisker was trying to woo in the hope of gaining financial assistance, help building EV platforms to expand its model range and access to a manufacturing facility in North America. Fisker’s only production model, the Ocean, is built by contract firm Magna Steyr in Austria.
Fisker stock hit a high of $28.50 in February 2021 but was trading at $6.23 in October 2023 and has fallen sharply since. In January of this year it fell below $1, earning the automaker a notice from the New York Stock Exchange that if it’s stock didn’t climb back up to a minimum of $1 within six months the company would be delisted.
Related: Fisker Pauses Production And Raises $150M, Holds Out For OEM Rescue
Fisker says it will ask investors to vote on a reverse stock split proposal at a shareholder meeting on April 24, but that’s still several weeks away. A reverse stock split involves merging existing stock to create a smaller number of more valuable shares.
Adding to the pressure is Fisker’s admission that it now won’t be able to meet all of the conditions necessary to access $150 million of desperately-needed cash it had provisionally secured by selling convertible notes. Fisker announced the mini bailout last week at the same time it confirmed it would be temporarily halting production of the Ocean. Slow sales of the SUV, in part due to a general slowdown in the EV market, but also because of buyer uncertainty over Fisker’s future, means it had built up too much stock.
The company’s cause wasn’t helped by a negative revue from prominent tech YouTuber MKBHD that gained widespread publicity, and then a video of a Fisker employee berating the dealer then lent MKBHD the SUV going viral. Consumer Reports also criticized the Ocean heavily for feeling unfinished, though other reviewers both in the U.S. and Europe have had positive things to say about the SUV.
Source: Reuters
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