Fisker shares have been halted as the EV company navigates an uncertain future

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The all-new Fisker Ocean electric SUV will be shown at the Los Angeles Auto Show on November 18, 2021 in Los Angeles, California.



CNN

Shares of Fisker, a California-based electric vehicle startup, were halted on Monday. This comes after the company warned in an earnings report in March that it might not have enough cash to survive the year.

Later in the day, the New York Stock Exchange announced that it planned to delist Fisker’s shares due to “abnormally low” price levels. That delisting means the company must offer to repurchase bonds currently due in 2026 and immediately pay off other debt due in 2025, according to a filing the company made with the Securities and Exchange Commission.

“We do not currently have sufficient cash reserves or financing sources sufficient to pay all amounts due under the 2026 Notes or the 2025 Notes, and as a result, such events could have a material adverse effect on our business, results of operations and financial status. ,” Fisker said in his filing.

Fisker’s shares traded as high as $28 in February 2021, valuing the company at just under $8 billion, but the stock is now trading for less than 10 cents per share, increasing the total market capitalization of the manufacturer of electric cars is reduced to less than $50 million.

Fisker had also previously said it was in talks with a major, established automaker, but those talks collapsed without a deal, according to a regulatory filing Fisker filed Monday. The company’s troubles are another sign of the headwinds and speed bumps facing the fast-growing EV industry.

Reuters had reported that it was in talks with Nissan, citing unnamed sources familiar with the discussions. Those discussions focused on Fisker’s planned electric pickup, the Alaska, according to the report.

Fisker was founded in 2016 by CEO, car designer Henrik Fisker. Its sole product, the Fisker Ocean electric SUV, was produced in Austria under contract to third-party manufacturer Magna Steyr. Last year, 10,000 SUVs were produced, but in its earnings report the company said only about half had been delivered to customers.

Henrik Fisker had expected that outsourcing production to Magna, a company that also builds cars for Mercedes, BMW, Jaguar and others, would reduce the company’s risks because it would not have to invest in its own production facilities.

Fisker had also announced plans to produce a small, affordable EV, the Pear. Foxconn, the Taiwanese electronics company best known for producing Apple’s iPhones, was in talks to produce the pear at a Foxconn factory in Ohio. Those conversations never came to fruition.

And lately, more bad news has been piling up for the company. The Ocean was the subject of a scathing review by American YouTube technology personality Marques Brownlee. The video was captioned: “This is the worst car I’ve ever reviewed.”

“Do not buy this version of the Fisker Ocean,” the video description reads. Brownlee’s video has been viewed more than 4.5 million times to date and caused Fisker’s stock price to plummet after its release.

Consumer Reports also recently published its own review of the Ocean, which panned the ride quality and software, although reviewers did appreciate the cargo space, rear-seat legroom and large glass moonroof.

Henrik Fisker admitted in an interview with the industry newspaper Automotive News that the Ocean had quality problems. He blames the problems on software from different suppliers that do not work well together. He said the problems were fixed through software updates.

But in addition to its own quality problems, Fisker faced much greater competition from established automakers than existed when the company was founded. Now, in addition to Tesla, companies like Hyundai, Kia, Ford and General Motors are offering electric SUVs that are substantially similar to the Ocean and without the risks of an unknown startup.

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