Fisker (NYSE:FSR) stock is plunging lower after the electric vehicle (EV) company reported its preliminary fourth-quarter earnings and warned of uncertainty in the future.
On Thursday, Fisker warned that there was “substantial doubt” about its ability to continue as a going concern once it submits all of its filings for 2023. The company added that it would need to raise either debt or equity because Fisker’s current level of capital is not enough to support it over the next 12 months. Fisker also noted that its business plan depends on its transition to a dealer partner model from a direct-to-consumer model.
“The company is currently in discussions with an existing noteholder about potentially making an additional investment in the company,” said Fisker. “The use of proceeds, if a transaction is consummated, is expected to be for general corporate purposes, vehicle production and the ongoing transition to a dealer-focused sales model.”
FSR Stock: Fisker Foreshadows Going Concern Warning
In order to move forward with its dealer partner model, Fisker will part ways with approximately 15% of its workforce. The layoffs are also attributed to cutting costs and reducing Fisker’s physical footprint. Fisker warned of additional layoffs, as well as decreased production, if it is unable to obtain financing.
In its earnings, Fisker revealed that it was in talks with a large automaker concerning a possible investment, joint development EV platform project and manufacturing plans in North America.
“This year, our focus will be on building brand awareness, carving out market share with the Fisker Ocean, streamlining our operations, closing a strategic OEM partnership, and building long-term value for our shareholders,” said CEO Henrik Fisker.
To top it off, Fisker disclosed that it would be unable to file its Form 10-K for the year ended Dec. 31 on time. The company noted that it has discovered a material weakness in revenue and “related balance sheet accounts” and is working to finalize its internal control review.
For Q4, Fisker generated $200.1 million of revenue, up by $128.3 million compared to the prior quarter. The company delivered 3,818 vehicles after delivering 1,097 vehicles in Q3.
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
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.
