Sometimes, the way forward is simply to take your losses and move on. There may have been a time when electric vehicle manufacturer Fisker (OTCMKTS:FSRN) was a promising business. However, that time is in the rear-view mirror, and investors can now bid a not-so-fond farewell to Fisker stock.
Lackluster demand for EVs means that investors need to be selective. Going on a rescue mission or a bottom-fishing expedition with fast-falling EV stocks isn’t a great idea right now. So, it’s best to just avoid FSR/FSRN stock as there’s little hope for a meaningful recovery.
Fisker Stock: Going From Bad to Worse
Typically, publicly listed companies don’t collapse all at once; there are warning signs along the way. In Fisker’s case, investors could see that the company’s stock was on a downward trajectory for quite a while.
Then, there was Fisker’s fourth-quarter 2023 financial report, which wasn’t exactly stellar. Wall Street estimated that Fisker would lose 22 cents per share during that quarter; the actual result was a loss of $1.23 per share.
The situation only got worse after that. Per The Wall Street Journal, Fisker made preparations for a “possible bankruptcy filing.” This happened after Fisker “warned that it risked running out of cash this year.”
Granted, there were a couple of news items that offered a false sense of hope. Specifically, The Wall Street Journal reported that Fisker “hired restructuring advisors,” and other sources noted Fisker was supposedly in talks with an unspecified large automaker.
Fisker’s Delisting Is the Final Nail in the Coffin
The few pieces of good news weren’t enough to make up for the bad news, however. Fisker halted production of its EVs in March and failed to make an interest payment on its debt. Yet, Fisker also announced that it was taking on more debt.
Additionally, Fisker’s talks with the above-referenced large automaker broke down. And finally, the New York Stock Exchange suspended the trading of Fisker shares and then officially delisted Fisker altogether.
The NYSE stated that Fisker’s shares were “no longer suitable for listing based on ‘abnormally low’ price levels.” Consequently, Fisker now trades on the over-the-counter market; some brokers will allow you to trade it via the ticker FSRN.
Thus, you can still buy Fisker stock, but this doesn’t mean you should buy it now. Clearly, the negative news outweighs the positive news, and it’s too risky to invest in Fisker at this point.
Say Farewell to Doomed Fisker Stock
Fisker is still tradable, but that doesn’t make it trade-worthy. Fisker’s financials are less-than-ideal, and the company appears to be having difficulty meeting its debt-payment obligations.
Besides, the vehicle-production halt is certainly problematic for Fisker. It really looks like Fisker might not survive amid a fiercely competitive EV market. Therefore, in the final analysis, investors should just avoid Fisker stock.
On the date of publication, David Moadel 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.
