This Roaring Kitty rally may not be a long-term fix for Fisker (OTCMKTS:FSRN) but it is certainly helping. To say that the electric vehicle (EV) startup is struggling would be an understatement. Since being delisted from the New York Stock Exchange, Fisker has been in an undeniable race to the bottom. Despite some pops on dealer partnership news, Fisker stock has quickly plunged back into the red every time without fail.
Now shares are rising again, even as the meme stock frenzy that overtook markets earlier this week cools down. Like microcap EV stock Faraday Future Intelligence Electric (NASDAQ:FFIE), Fisker has managed to continue rising while more popular meme stocks have fallen.
Does this mean that Fisker can reach the $1 mark like Faraday? It seems unlikely, but the company’s recent surge still warrants a closer look. This is the first time in months that Fisker has displayed any consistent momentum.
What’s Happening With Fisker Stock
Granted, today hasn’t been all growth for Fisker. Shares rose early in the morning only to dip, though they have since regained upward momentum. As of this writing, Fisker stock is up over 50% for the day and is currently showcasing a clear positive trajectory. The company hasn’t come close to Faraday’s gains, but it is certainly making progress.
That said, this week also brought some positive company-specific news for Fisker. It recently closed the sale of $3.45 million in senior secured notes, due to mature on June 24. This announcement coincided with yesterday’s meme stock momentum, but it definitely seems to have helped Fisker stock. However, it doesn’t mean the company is out of the woods. Not by a long shot. As InvestorPlace‘s Eddie Pan reports:
“While the note sale will provide Fisker with much-needed capital, it still isn’t enough to save the company from its poor rollout of the Ocean SUV. Following price cuts of up to 39% and numerous complaints alleging software issues, many consumers have lost trust in the company. However, the price cuts did result in Fisker selling out of the sport trim of the Ocean in the continental United States.”
This highlights just how many problems Fisker stock is still facing. Despite the recent tailwinds it has enjoyed, the company is still facing many issues, including the looming threat of bankruptcy. And even after rising 60% over the past few days, FSRN still trades at only $0.063 per share. It still has tremendous ground to make up before it even gets close to the $1 mark.
Why It Matters
When a retail trading frenzy takes a fallen company like Fisker higher, it’s tempting to call it the next meme stock. But at this point, Fisker stock simply has too many strikes against it to capture sustainable momentum.
It will take a lot more than some secure note sales and interest from the r/WallStreetBets crowd to make it worth betting on. Even speculative traders are likely realizing that FSRN is on its way out, as it has been for months.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Samuel O’Brient 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.
