Electric vehicle maker Fisker (NYSE:FSR) has announced a new series of non-fungible tokens (NFTs) as it share price continues to slide lower.
So what do you need to know?
Manhattan Beach, California-based Fisker is launching an NFT series designed by company founder Henrik Fisker.
The move to get into NFTs, which have proven to be a hot market with cryptocurrency enthusiasts this year, is potentially a Hail Mary pass from the company as its electric vehicle production falters. The FSR stock price has fallen 20% in the last month.
What Happened With FSR Stock
Non-fungible tokens, often called digital art, are digital assets that include photos, videos, audio files and drawings that are stored and traded on the blockchain. There is a rapidly growing market for NFTs. In fact, in March, artist Beeple sold one NFT for nearly $70 million.
https://twitter.com/henrikfisker/status/1472904702178123776?
Investors should note that the NFT news comes after Fisker reported third-quarter earnings. In that report, the company shared it was on track to begin production of its Ocean SUV by the end of 2022. Fisker also announced that, as of Nov. 2, it has received 18,600 preorders.
Why It Matters
FSR stock is currently nearly 50% below its 52-week high of $32 per share. Shares have been under pressure for most of this year as investors await production of the Ocean SUV.
NFTs are viewed by many market observers as risky investments given their ties to volatile cryptocurrencies. However, despite warnings from some corners, prices for NFTs have continued to rise this year and a growing number of prominent celebrities, from football star Tom Brady to rapper Snoop Dogg, have endorsed them. Fisker’s move into NFTs could be beneficial in the long run, though it is difficult to see how it ties to the manufacturing of electric vehicles.
What’s Next for Fisker
FSR stock is down 3% in trading today amid broader market weakness. News that the automaker is moving into NFTs does not appear to be helping its share price any.
If anything, investors appear to view the expansion into digital art and blockchain as a risky move by the company that is already struggling to get its first electric car to market. Investors should proceed cautiously with Fisker stock given its recent weakness.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
