I won’t even try to hide my excitement about electric vehicle manufacturer Fisker (NYSE:FSR). Ever since the company went public through a reverse merger with Spartan Energy Acquisition back in October, I’ve been quite bullish on FSR stock.
Don’t get the wrong idea. Like all electric vehicle start-ups, Fisker is a speculative investment. I definitely don’t recommend pouring a large portion of your account into this stock.
On the other hand, accumulating a few shares could be a good strategy. And with the share-price dump that befell FSR stock in March, there could be a major buying opportunity.
Plus, there have been some company-related developments which should pique your interest. We’ll get to those shortly, but first let’s break down the stock’s recent price movements.
A Closer Look at FSR Stock
OK, I’ll admit it. March of 2021 wasn’t a great month for FSR stockholders.
Unfortunately, the bulls seem to have capitulated as the share price fell from $27 and change on March 1 to $16.88 on April 1.
But then, we should put this decline in context. There was a strong run-up in the share price in late February. Moreover, the stock is still significantly higher than its 52-week low of $8.70.
Besides, contrarian investors are supposed to buy stocks when the sentiment is negative, right? That’s part of the whole “buy low, sell high” strategy, though of course it’s easier said than done.
If you want to wait until the bulls retake control of the price action, that’s understandable. Given the recent good news pertaining to Fisker, however, you probably won’t want to wait for too long.
A Partnership, and a Revolution
Just to provide a quick recap, the main focus of Fisker is on manufacturing its flagship model, an electric SUV called the Ocean. The launch of this vehicle is expected to take place in 2022’s fourth quarter.
Yes, I know, that’s a long way away. That’s why investors in FSR stock will need to be patient, and have faith in the company.
Yet, it’s not easy for investors to wait that long, and some updates along the way would be nice. Fortunately, Fisker has given its stakeholders recent developments to get excited about.
The most noteworthy of these might be the announcement of Fisker’s manufacturing deal with Taiwan-based electronics contract manufacturer Foxconn Technology Group.
Reportedly, there’s a memorandum of understanding specifying that Foxconn is to produce more than 250,000 electric vehicles per year for Fisker.
These won’t be Ocean vehicles, by the way. Rather, this will be an as-yet-unnamed “new segment vehicle” with a target assembly start time set for the fourth quarter of 2023.
The two companies even gave the deal a fancy code name: “Project PEAR,” or Personal Electric Automotive Revolution. It doesn’t get much more ambitious than that, does it?
Taking a Chance in France
Speaking of memorandums of understanding, Fisker also recently signed one of those with Crédit Agricole Consumer Finance, which is part of French financial firm Crédit Agricole (OTCMKTS:CRARY).
According to the press release accompanying this event, Crédit Agricole is “one of the largest banking groups in Europe,’ and the deal is for the “potential supply of” Fisker’s Ocean SUV’s.
Under the agreement, Crédit Agricole Consumer Finance division Agilauto will be able to purchase Ocean SUV’s for use “by eligible employees and selected private banking clients of the group.”
The delivery of these vehicles is expected to commence as early as January 2023.
With this, Fisker Chairman and CEO Henrik Fisker took the opportunity to report that “60% of new vehicle sales in Europe are through business-to-business transactions.”
The implication, it seems, is that the deal with Agilauto could offer Fisker a pathway to greater vehicle sales not only in France, but throughout Europe.
The Bottom Line
FSR stock didn’t do well in March, but could still march toward higher prices in the second quarter.
Patience will be required, without a doubt. Still, Fisker’s stakeholders should hold on to their positions.
With recent news items in view, the outlook remains bright for this ambitious electric vehicle niche disruptor.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
