Small electric vehicle company Faraday Future (NASDAQ:FFIE) rose 6% in pre-market trading after issuing a press release where it promised legal action against what it called “market manipulation” of its shares.
“If the Company finds any illegal short selling, other market manipulation or misinformation it intends to take available legal action,” the press release said.
Faraday Future was due to open Sept. 8 at $4.23 per share. At that price, the market capitalization is $73 million.
Faraday Future’s Past
As InvestorPlace has reported, Faraday Future has tried for years to make an electric car called the FF 91. It has been stymied by lack of capital.
The company was founded in 2014 with promises to start production in 2017. Co-founder Jia Yueting resigned in 2019 and filed personal bankruptcy.
For a time, Faraday had financing from property developer Evergrande, which filed for U.S. bankruptcy protection in August. The company is now led by Xuefeng Chen, who reorganized its management late last year.
Production of the FF 91 was due to finally begin last month.
After making its production promises, Faraday went through a 1-for-80 reverse stock split to maintain its Nasdaq listing. When I wrote about this early in August, FFIE’s market cap was $400 million.
Faraday is now planning a series of “Delivery Co-Creation Days,” starting this month, to celebrate the delivery of each car it makes. Shareholders are being invited to participate and visit the company’s Los Angeles offices.
What Happens Next With FFIE Stock?
Analysts are covering the latest press release without including background from Faraday’s own past press releases.
Claiming “suspicious activities” suggesting a “coordinated effort” to undermine valuation sounds great when you have a going concern. But when you’re still delivering individual cars in a market scaling to deliver millions of them, it’s legitimate to ask what is going on.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
As of this writing, Dana Blankenhorn 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.
