This week, The Wall Street Journal reported that Fisker (NYSE:FSR) had hired financial adviser FTI Consulting and law firm Davis Polk to assist with a possible restructuring and bankruptcy filing.
The company had recently noted that it expected to have “substantial doubt” about its ability to continue as a going concern once it submitted its financial statements for 2023. Fisker also added that it would lay off about 15% of its workforce in order to cut costs and increase liquidity. On March 1, the electric vehicle (EV) company disclosed that its 2023 Form 10-K would be delayed due to internal control reviews and a material weakness in revenue.
Now, shares of FSR stock are rising today following a response from the company. Let’s get into the details.
FSR Stock: Fisker Responds to Bankruptcy Talks
In response to the restructuring advisors, Fisker noted that it frequently works with external advisors to assist with business operations. The company also reiterated that it was in talks with a large automotive company in regards to a partnership. No new information was provided.
“Fisker is focused on raising additional capital and engaging in a strategic partnership with a large automaker. The company is also continuing to pursue its shift to a Dealer Partnership model in both North America and Europe,” said Fisker.
Earlier this month, Reuters reported that Nissan (OTCMKTS:NSANY) was in “advanced talks” to invest more than $400 million into Fisker’s truck platform. According to sources familiar with the matter, the term sheet has already been prepared while a deal could close by as soon as this month. The deal would allow Nissan to manufacture Fisker’s upcoming Alaska pickup truck at one of its U.S. plants starting in 2026.
In its preliminary fourth-quarter earnings, Fisker stated that it was addressing its liquidity concerns by holding talks with an existing noteholder involving an additional investment. These proceeds would be used toward vehicle production, general business expenses and transitioning to a dealer-focused model. No further updates have been given since then.
As it stands, FSR stock is a risky investment. Raising capital would dilute shareholders while a bankruptcy would have devastating effects.
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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.
