Fisker (OTCMKTS:FSRN) stock is no longer showing up on brokerages as FSR stock after the struggling electric vehicle (EV) company announced that the New York Stock Exchange had suspended trading of FSR as a result of an “abnormally low” stock price. The NYSE also disclosed yesterday that it would begin the process of delisting FSR.
Now, shares of Fisker have begun trading on the over-the-counter (OTC) market. Fisker noted that the OTC market is much less liquid with lower volume, meaning trades are harder to execute. This could also lead to a lower FSRN stock price.
What’s more, the delisting will force Fisker to offer to repurchase its 2026 unsecured 2.50% convertible notes and result in an event of default on its 2025 senior secured convertible notes. The default would allow the 2025 noteholders to receive all note payments immediately.
NYSE Begins Process of Delisting FSR Stock
Unfortunately, Fisker doesn’t have enough cash on hand to pay its 2025 and 2026 noteholders.
“We do not currently have sufficient cash reserves or financing sources sufficient to satisfy all amounts due under the 2026 Notes or the 2025 Notes, and as a result, such events could have a material adverse effect on our business, results of operations and financial condition,” said Fisker.
A string of untimely events ultimately led to this outcome. After the market close last Friday, Fisker revealed that the large automaker it was in “advanced talks” with had terminated negotiations. Reuters had previously reported that the large automaker was Nissan (OTCMKTS:NSANY) and that it was interested in investing $400 million into Fisker’s truck platform.
As a result of the termination, Fisker was unable to satisfy a closing condition for a $150 million financing commitment through the sale of 2024 senior secured convertible notes. The company added that it would seek to waive the closing condition or adjust the terms of the deal.
With the delisting and financing on the line, its unclear whether Fisker will move ahead with the proposals for its special meeting on April 24. The first two proposals involve issuing more shares and increasing authorized shares in relation with the $150 million financing commitment. The third proposal seeks a reverse split in order to satisfy the NYSE’s minimum price continued listing requirement.
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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.
