Shares of electric vehicle (EV) maker Faraday Future (NASDAQ:FFIE) are trending on Wednesday, with shares down about 15% on the day. At one point, FFIE stock was down 21.7%.
The company published a new shareholder letter, which discusses a production delay. Management also notes an upcoming vote on a reverse stock split. While they talked about future opportunities as well, investors are focused on the more immediate setbacks.
Yun Han, the company’s Interim Chief Financial Officer and Chief Accounting Officer, wrote the following letter to shareholders:
“Delay in the second phase of our three-phase delivery plan exposes urgent needs for improved industrialization capabilities and financing capabilities at FF. I sincerely apologize for the postponement of the second phase of our three-phase delivery plan of the FF 91 2.0 Futurist Alliance to August 2023.
He added:
“First, a reverse stock split will quickly change the low stock price status, paving the way for the introduction of large institutional investors…In order to quickly break the financial bottleneck and promote the successful implementation of FF’s Ultimate AI TechLuxury strategy, the Company believes new issuances of common stock and warrants are a prerequisite for attracting institutional investors and unleashing FF’s ‘Five Success-Defining Powers.”
It’s common knowledge that Faraday’s industry is not an easy one. According to the company, it “designs and engineers next-generation smart electric connected vehicles.”
What to Make of FFIE Stock Now
Given the setbacks, the outlook is a bit bleak for FFIE stock at the moment. While analysts call for modest revenue of $43.75 million this year, that figure is expected to accelerate dramatically next year. However, that estimate will likely be reduced given the news that’s now coming public.
Unfortunately, FFIE stock has not performed well for investors. Despite some pretty strong momentum in mega-cap tech and the overall market, this name has been getting crushed.
Alongside Wednesday’s decline, shares fell 37.5% on Tuesday. For the week, the stock is currently down almost 50%.
While FFIE stock is only down 13.3% so far on the year, shares have been hammered from the highs. Down more than 96% from the one-year high and 98.5% from the all-time high, investors have clearly been bailing on this name.
Can FFIE turn around? Time will tell, but its performance has been terrible as FFIE shares turn into a speculative play.
On the date of publication, Bret Kenwell 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.
