Faraday Future (NASDAQ:FFIE) stock is falling hard on Tuesday after the electric vehicle (EV) company revealed plans for a reverse stock split.
According to a press release from Faraday Future, the company’s board of directors is seeking approval from shareholders for a reverse stock split. The company’s board wants to enact the reverse split on a basis ranging from 1-for-2 and 1-for-90 shares.
Faraday Future will hold a special shareholder meeting so investors can vote on the reverse stock split. The company intends to provide details on this meeting, such as the date and time, soon. After it gets approval, the company’s board will determine the ratio for the reverse stock split.
Why a FFIE Reverse Stock Split?
Faraday Future argues that a reverse stock split would open the company up to a wider range of investment opportunities. It says the current price of the stock is too low to attract attention from certain brokerage houses and institutional investors.
To go along with that, the reverse stock split would boost FFIE stock above the $1 minimum bid requirement. Currently, shares are trading for about 30 cents per share. If the price remains that low for too long, FFIE is in danger of being delisted from the Nasdaq Exchange.
Also tucked away in this reverse stock split plan is an update on the FF 91 2.0 Futurist Alliance Phase 2 delivery. Due to certain timing issues with suppliers, the company is delaying this launch from the end of Q2 2023 to August 2023.
FFIE stock is down 35.4% as of Tuesday morning.
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On the date of publication, William White 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.
