Photo: Fisker
Fisker has been on a fast downhill roll in 2024 after the company admitted it needs to raise more capital to stay afloat. Partnership talks with a big automotive company ended abruptly, crashing share prices into the ground. This prompted the New York Stock Exchange (NYSE) to initiate measures to delist Fisker, with bankruptcy now inevitable.
It's a tough year for automotive startups as the electric vehicle market consolidates, and Tesla is the big winner. Earlier this month, Fisker announced disappointing financial results, reflecting the low quality of its vehicles. Fisker Ocean, its current shipping model, was riddled with software issues. This has led to poor sales, with roughly half of the 10,000 units built in 2023 still in the inventory. This put an enormous strain on the already cash-strapped company.
Fisker announced earlier this month that it's discussing a potential partnership with a major carmaker. Industry insiders revealed that Nissan was the carmaker, and the talks included plans to produce Fisker's Alaska pickup truck in the US. However, Nissan announced its EV plans on Monday and did not include any partnership with Fisker. Fisker also admitted that the talks had fallen through, sending the company's shares into a tailspin.
The outcome prompted the New York Stock Exchange (NYSE) to suspend trading of the Fisker stock after the share price reached $0.09. The Exchange also commenced procedures to delist the Class A common stock of Fisker Inc. from the NYSE based on "abnormally low" price levels. The NYSE still has to apply to the SEC to delist Fisker upon completion of all procedures, including a potential appeal by the company to the NYSE's decision.
In the case of stock delisting, the company will be required to repurchase its unsecured 2.50% convertible notes due in 2026. According to Reuters, it will also trigger an event of default under its senior secured convertible notes due 2025. The problem is that Fisker doesn't have enough cash reserves to satisfy all amounts due under the 2026 or 2025 Notes. Financial analysts think that Fisker's bankruptcy is now inevitable, making it the second failed startup of Henry Fisker.
Unfortunately, Fisker's bankruptcy will not affect only investors but also the Fisker owners. Their vehicles still need software updates just to make them work, and those updates won't come anymore. At the same time, their resale value will follow the Fisker shares downward trend, leaving unlucky people holding an empty bag. Imagine taking a loan to purchase a $60K+ Fisker Ocean that now has no value whatsoever, and you can't even use it.
People hope that some other company will buy Fisker and continue the work, but this is unlikely. Fisker pioneered an "asset light" strategy, with manufacturing outsourced to Magna Steyr in Austria. This means that the EV startup doesn't have many things that other companies might find interesting: no assets and no meaningful intellectual property. It's only a name synonymous with failure, and nobody wants such a name.
Fisker announced earlier this month that it's discussing a potential partnership with a major carmaker. Industry insiders revealed that Nissan was the carmaker, and the talks included plans to produce Fisker's Alaska pickup truck in the US. However, Nissan announced its EV plans on Monday and did not include any partnership with Fisker. Fisker also admitted that the talks had fallen through, sending the company's shares into a tailspin.
The outcome prompted the New York Stock Exchange (NYSE) to suspend trading of the Fisker stock after the share price reached $0.09. The Exchange also commenced procedures to delist the Class A common stock of Fisker Inc. from the NYSE based on "abnormally low" price levels. The NYSE still has to apply to the SEC to delist Fisker upon completion of all procedures, including a potential appeal by the company to the NYSE's decision.
In the case of stock delisting, the company will be required to repurchase its unsecured 2.50% convertible notes due in 2026. According to Reuters, it will also trigger an event of default under its senior secured convertible notes due 2025. The problem is that Fisker doesn't have enough cash reserves to satisfy all amounts due under the 2026 or 2025 Notes. Financial analysts think that Fisker's bankruptcy is now inevitable, making it the second failed startup of Henry Fisker.
Unfortunately, Fisker's bankruptcy will not affect only investors but also the Fisker owners. Their vehicles still need software updates just to make them work, and those updates won't come anymore. At the same time, their resale value will follow the Fisker shares downward trend, leaving unlucky people holding an empty bag. Imagine taking a loan to purchase a $60K+ Fisker Ocean that now has no value whatsoever, and you can't even use it.
People hope that some other company will buy Fisker and continue the work, but this is unlikely. Fisker pioneered an "asset light" strategy, with manufacturing outsourced to Magna Steyr in Austria. This means that the EV startup doesn't have many things that other companies might find interesting: no assets and no meaningful intellectual property. It's only a name synonymous with failure, and nobody wants such a name.
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