Editor’s note: This article was updated on Dec. 6 to reflect that CEO Henrik Fisker and CFO and COO Geeta Gupta-Fisker purchased a total of 33,700 shares.
Fisker (NYSE:FSR) stock is in full focus today following insider buys from three top executives. CEO Henrik Fisker and CFO and COO Geeta Gupta-Fisker reported purchasing 33,700 shares of Class A common stock. The pair co-founded the company in 2016.
Using yesterday’s closing price of $7.38 per share, the transactions in total were worth about $248,000. In addition, Chief Accounting Officer John Finnucan didn’t want to miss out on the fun. He reported purchasing 450 shares. All three purchases were made yesterday, Dec. 5.
These three buys come on the heels of a scathing short report from Fuzzy Panda. In the report, the short seller makes several allegations, such as stating that Fisker owes between $790 million and $825 million in bank guarantees to its contract manufacturer, Magna’s (NYSE:MGA) Magna Steyr.
As of the third quarter, Fisker had $825 million of cash. Fuzzy also claims that Fisker doesn’t own the intellectual property (electric vehicle (EV) platform and that its CEO has a questionable background.) to its Ocean
FSR Stock: Executives Buy in Amid Short Report
In response to the short report, Fisker released a press release that confirmed that it does not have bank guarantees with Magna. The company also stated that it owns the IP to the Ocean platform and that “immediate and aggressive action” will be taken to address the short report. Furthermore, the company issued a cease-and-desist letter to Fuzzy Panda and told employees to keep quiet about the “largely misleading” situation on social media.
Fisker did not immediately address the allegations of Henrik Fisker’s background or that the Ocean SUV has 80% of the same parts as BAIC’s Arcfox Alpha T, a Chinese EV developed on the same platform as the Ocean.
That said, the recent insider buys are a stamp of confidence from the three executives and shows that they believe the report is inaccurate. On the other hand, Citi lowered its price target to $21 from $28 following the report. Still, analyst Itay Michaeli didn’t factor the report into his price target and instead analyzed data points from the third quarter, conversations with management and the Ocean drive event in Europe. Michaeli explained:
“Overall, despite macro challenges, we continue to like the risk/reward here on relative valuation, our favorable view of the Ocean’s future commercial success and the company’s asset-light model/speed-to-market.”
Looking forward, Michaeli plans on keeping an eye on the ramp-up progress of the Ocean and potential licensing deals for the Ocean platform.
On the date of publication, Eddie Pan did not hold (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.