Fisker (NYSE:FSR) stock is falling hard on Thursday as reports claim the electric vehicle (EV) company is considering a bankruptcy filing.
According to these recent reports, anonymous insiders claim that the EV company has hired advisors to assist with its bankruptcy filing. The insiders specifically name FTI Consulting and Davis Polk as its financial advisor and law firm assisting with the filing.
Investors will note that this report comes after the company warned earlier this year that it may run out of cash. This isn’t too much of a surprise considering sales haven’t taken off as the company hoped, and its debt has ballooned to over $1 billion, reports The Wall Street Journal.
What This Means for FSR Stock
Considering the financial trouble the company is in, it might not be long before Fisker shares leave the public market. The stock would be in danger of being delisted once a bankruptcy filing is made.
It also bears mentioning that this would mark the second time that Henrik Fisker has failed to produce a productive car company. His first attempt was Fisker Automotive, which went bankrupt in 2013.
FSR stock is down 41% as of Thursday morning, with some 13 million shares traded. The company’s daily average trading volume is about 55.2 million shares.
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On the date of publication, William White did not have (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.
