Fisker slumps as cash warning sends investors 'running for cover' (updated)
01/03/2024 14:58
(Updates shares in paragraph 1,3, adds analyst comment in
paragraphs 6,7)
By Akash Sriram
March 1 (Reuters) -
Cash-strapped Fisker's shares FSR.N skid nearly 47% on
Friday after the electric vehicle startup flagged going-concern
risks, job cuts and a pause in investments into future projects
until it secures a partnership with a manufacturer.
The company warned of a "difficult year" ahead, the latest
sign of growing pain in the EV sector after weak production
forecasts from Rivian RIVN.O and Lucid LCID.O .
Fisker, whose shares hit a record low at 38 cents, has
also received a notice from the New York Stock Exchange over
non-compliance with a listing rule.
High interest rates, range anxiety while driving and high
repair costs are making consumers rethink EV purchases and
instead opt for hybrids.
Fisker expects to make between 20,000 and 22,000 Ocean
vehicles in 2024, below estimates of 35,600, according to
Visible Alpha.
"The company's decision to cut 15% of its staff knocks its
credentials as a growth stock and its warnings about its ability
to operate as a going concern is understandably sending
investors running for cover," said Russ Mould, investments
director at AJ Bell.
Fisker lacks the scale to compete effectively given high
interest rates, Mould added.
The company ended 2023 with cash and cash equivalents of
$325.5 million, down from $527.4 million as of Sept. 30, after
its net loss more than doubled in the fourth quarter to $462.6
million.
Fisker also said current resources were "insufficient" to
cover the next 12 months, despite a "higher-than-usual" cash
injection in the first half of 2024 from late deliveries of its
Ocean SUVs.
The company is trying to pivot to a dealer-partner model
from the direct-to-customer model popular among EV peers.
CEO Henrik Fisker said the firm was not planning to start
"external expenditure" on future projects - the Alaska pickup
truck and PEAR compact car - unless it secures another
manufacturing partner.
He added that Fisker was in talks with a large automaker for
an investment, joint development of EV platforms or
manufacturing in North America.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Fisker's cash balance depletes as it ramps up EV deliveries https://reut.rs/49FvWBC
Fisker's shares vastly underperform EV peers https://reut.rs/49UrZIJ
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(Reporting by Akash Sriram in Bengaluru; Editing by Devika
Syamnath)
((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti;
+91-74116-87774;))