Fisker (FSR) unloaded a cache of dangerous information throughout its This autumn earnings report yesterday, shaking buyers and Wall Road analysts.
Fisker reported that given its monetary situation, evolving dealership gross sales method, and difficult EV market, it has “substantial doubt about its capacity to proceed as a going concern” when the corporate recordsdata its official monetary statements for 2023. Fisker additionally stated it could cut back its headcount by 15%.
Fisker stated it had $396 million in money on the finish of This autumn, although $70 million of that’s restricted. Fisker stated it’s in talks with a present noteholder about making a further funding within the firm and that it is negotiating with “a big automaker for a possible transaction which may embrace an funding in Fisker, joint growth of a number of electrical car platforms, and North America manufacturing.”
Whereas talks of a money infusion and strategic partnership with a longtime automaker are welcome information, it wasn’t sufficient to finish doubts of Fisker’s precarious situation. Shares of the EV maker tumbled over 40% in early commerce, with shares now caught beneath $1 since early January.
Citi analyst Itay Michaeli usually feels Fisker’s lone product, the Ocean EV, holds promise and isn’t stunned that a big automaker is eager about investing in Fisker, however this isn’t sufficient for him to maintain the religion in Fisker.
“Securing such an settlement would probably function a significant constructive for Fisker, but it surely’s arduous to underpin an funding thesis fully on this, and we might’ve appreciated to have seen extra progress on this entrance by now,” Michaeli wrote in a word to buyers. Michaeli downgraded the inventory to Impartial/Excessive Threat (equal of a Maintain) and lower his value goal to $.80 from $4.
In This autumn, Fisker reported income of $200.1 million, lacking Bloomberg consensus estimates for $272.9 million, and a internet lack of $463.6 million, a lot wider than the $82.7 million loss anticipated.
“2023 was a difficult yr for Fisker, together with delays with suppliers and different points that prevented us from delivering the Ocean SUV as rapidly as we had anticipated,” chairman and CEO Henrik Fisker stated. “There have been quite a lot of unanticipated challenges, together with rising rates of interest, discovering sufficient expert labor, and figuring out applicable actual property areas to make the DTC mannequin perform successfully.”
Fisker’s challenges in organising its direct-to-consumer mannequin led the corporate to hunt out conventional supplier partnerships, with the corporate revealing it now has 12 supplier companions readily available and over 250 sellers .
Whereas speak of recent partnerships and a supplier gross sales community is promising, the principle concern for buyers is Fisker’s lack of money.
“If the corporate had ample liquidity via 2025, then threat/reward would arguably be fascinating right here with the inventory having come below important stress,” Michaeli wrote. “However with the liquidity runway narrowing and accounting/reporting points nonetheless unresolved, it’s arduous to make an funding case right here with such poor [near-term] visibility.”
Programming word: You should definitely watch Fisker chairman and CEO Henrik Fisker reside on Yahoo Finance immediately at 4 p.m. ET.
Pras Subramanian is a reporter for Yahoo Finance. You possibly can observe him on Twitter and on Instagram.
Learn the newest monetary and enterprise information from Yahoo Finance
