Fisker Shares Suspended as EV Company Navigates Turbulent Future

On Monday, Fisker, an electric vehicle start-up based in California, halted shares just after the company alerted investors in its earnings report in March that it might not have money to make it through the year.

Following the alarming report, the New York Stock Exchange disclosed its intention to delist Fisker’s stock because of “abnormally low” price levels. According to a filing with the Securities and Exchange Commission, the company’s delisting will require it to repurchase bonds maturing in 2026, and it will need to immediately settle other debts that are due next year.

In its filing, Fisker said, “We do not currently have sufficient cash reserves or financing sources sufficient to satisfy all amounts due under the 2026 Notes or the 2025 Notes, and as a result, such events could have a material adverse effect on our business, results of operations and financial condition.”

In February 2021, the company’s shares traded at $28, valuing it just below $8 billion. Now the shares are trading for below 10 cents per share, with a decreased total market capitalization below $50 million.

According to a regulatory filing made by Fisker on Monday, previously, it had said it was in discussion with big, renowned automakers. However, those talks didn’t materialize. The challenges faced by the company are signs of the hurdles in the EV industry.

Sources familiar with the matter revealed that Fisker was in discussions with Nissan regarding Fisker’s forthcoming electric pickup, called the Alaska.

The automobile company was founded in 2016 by CEO and auto designer Henrik Fisker. Fisker put itself on the map for its flagship product, the Fisker Ocean electric SUV. The SUV was constructed by third-party manufacturer Magna Steyr in Austria and it reported production of 10,000 SUVs last year. However, in its recent earnings report, Fisker disclosed that only around half of these vehicles had been delivered to customers.

Henrik Fisker devised a strategy to outsource manufacturing to Magna, a renowned manufacturer for brands like BMW, Jaguar, and Mercedes-Benz. This move aimed to reduce the company’s risk by eliminating the need for substantial investment in its own manufacturing facilities.

To add to its ongoing efforts, the company revealed plans to manufacture a compact, cost-effective EV called Pear. Fisker had entered discussions with Foxconn, the Taiwanese electronics giant popular for producing Apple’s iPhones, regarding the potential production of Pear at Foxconn’s Ohio-based factory. However, these discussions ultimately failed to materialize.

The grim picture for the company became bleaker in recent times as it was the subject of a poor review by American YouTube tech personality Marques Brownlee. The video was named, “This is the Worst Car I’ve Ever Reviewed.”

Brownlee’s video, which brought in over 4.5 million views to date, has a description that reads, “Do not buy this version of the Fisker Ocean.” This led to Fisker’s stock price dropping significantly.