CEO Henrik Fisker addressed the collapse of Fisker (NYSE:FSR) stock, writing that negative reports about the electric vehicle (EV) maker are “overblown.”
Shares are down over 65% in just the last month.
Initial reaction to Fisker’s statement was positive. Shares were up 4% overnight. They were due to open at $1.48 each, a market capitalization of about $500 million.
Fisker Shaken, Not Stirred
Fisker said in November it lost $91 million in the third quarter, 27 cents per share, on revenue of $71.8 million.
However, a day after those numbers came out, Chief Accounting Officer Florus Beuting resigned. He had been at his job for just two weeks.
The next day, Fisker admitted to “material weakness” in its internal accounting. Fisker now faces a lawsuit over the issue.
Fisker began delivering its Ocean SUV this year, producing 4,725 in the third quarter. Its hopes for profitability ride on the Pear, a lower-priced crossover due in 2024.
Fisker has slowed its roll, however, to preserve working capital. It now says it will deliver just 10,000 cars this year, down from previous estimates of 17,000. Fisker has also hired a new executive vice president and said it plans to seek new strategic partners.
Fisker has never had big-name backers. This is unlike Rivian (NASDAQ:RIVN), which got early support from Amazon (NASDAQ:AMZN) and the state of Georgia. It’s also unlike Lucid (NASDAQ:LCID), which is now majority-owned by the Kingdom of Saudi Arabia. This is why I have long been leery of the stock.
Fisker came public through a special purpose acquisition company (SPAC) called Spartan Energy in late 2020, raising about $1 billion. It is the founder’s second namesake company. A previous effort in hybrid cars collapsed in 2013.
FSR Stock: What Happens Next?
The EV market is going through an inevitable shakeout as the high-end is saturated. The mid-market needs scaled production backed by serious amounts of cash.
Fisker could be among the names shaken out.
As of this writing, Dana Blankenhorn held a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
