In a significant blow to the electric vehicle (EV) industry, the New York Stock Exchange (NYSE) announced the immediate suspension of trading shares of EV startup Fisker. This decision comes after Fisker’s stock price plummeted to “abnormally low” levels, violating the exchange’s listing rules. Let’s cut into the details of this suspension and what it means for Fisker’s future.
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NYSE’s Decision
The NYSE declared on Monday that Fisker’s stock is no longer suitable for listing due to its “abnormally low” price levels. This move comes a month after the NYSE warned Fisker that its stock had been trading below $1 for 30 consecutive days, making it non-compliant with the exchange’s regulations. While Fisker has the option to challenge the NYSE’s determination, the company anticipates its stock will be shifted to an over-the-counter market, such as OTC Pink. Additionally, the delisting has triggered repayment clauses in two outstanding loans that Fisker currently cannot afford, posing a significant risk to the business.
Tumultuous Day for Fisker
The suspension marked a tumultuous day for Fisker, with shares plunging over 28% before trading was halted. Earlier in the day, Fisker revealed the loss of a potential deal with a major automaker, rumored to be Nissan. This setback jeopardized a recently announced attempt to secure emergency funding. Although Fisker did not provide details on why the negotiations were terminated, the deal was a critical closing condition for a potential $150 million convertible note announced just last week. Fisker intends to request the unnamed investor to waive this closing condition.
Fisker’s Ongoing Challenges
Fisker’s financial woes have been escalating for months, compounded by customer complaints, lawsuits, and federal investigations. The struggling EV startup has faced difficulties selling its Ocean SUV, failing to meet its own internal sales targets. In January, TechCrunch reported Fisker’s pivot from a direct sales model to leveraging dealerships to boost sales. Moreover, the company has grappled with quality issues, some of which it has struggled to address, according to internal documents.
Financial Struggles
In February, Fisker laid off 15% of its workforce, approximately 200 employees, and as of last week, reported a cash balance of just $121 million. The company has halted production and cautioned investors that it would not survive another year without a fresh infusion of capital.
The NYSE’s decision to suspend Fisker’s trading underscores the company’s dire financial situation and ongoing challenges in the competitive EV market. As Fisker navigates these turbulent waters, the future looks uncertain for this once-promising EV startup.
- Exchange: New York Stock Exchange (NYSE)
- Company: Fisker (EV startup)
- Reason for Suspension: “Abnormally low” stock price
- NYSE Warning: Stock trading below $1 for 30 days
- Potential Market: Over-the-counter (OTC) market, possibly OTC Pink
- Financial Impact: Triggered repayment clauses in two loans
- Share Plunge: Over 28% before trading halt
- Lost Deal: Major automaker, rumored to be Nissan
- Convertible Note: Potential $150 million, jeopardized by lost deal
- Workforce Reduction: 15% layoffs in February (approx. 200 employees)
- Cash Balance: $121 million as of last week
