AutoBeta(AutoBeta.net)10/16 Report--

On October 16th, Jia Yueting, founder of Faraday Future (FF), published an open letter to all shareholders and investors. Jia Yueting said in the open letter: "I am actually the most anxious about the serious deviation between the true value of FF and the value of the capital market. I am deeply ashamed that I have not brought the due value return to all shareholders and investors, and I most hope to make every effort to maximize the value of FF. "

"as FF entered the delivery revenue phase in August this year, the company has formed a complete closed loop from user acquisition to delivery to user operation," Jia said. "apart from being restricted by the financial situation, the company is in a good stage of development since its inception and is a critical period for business take-off." At the same time, Jia Yueting mentioned in the letter, "at present, the company's stock price and market value have suffered the darkest moment, and the company's market value has fallen to less than 1% of the total cash investment of more than $3 billion, which is extremely sad and disappointed."

Affected by this, FF shares rose 11% before trading.

The twists and turns of the car-building road have a direct impact on Faraday's future situation in the capital market. On July 22, 2021, FF was listed backdoor on NASDAQ and officially traded under the stock symbol "FFIE". The offering price of FFIE was $13.78 and closed up 1.45% on the first day to close at $13.98, with a total market capitalization of $4.535 billion. However, due to multiple jumps in mass delivery, coupled with FF's continuing funding problems, FF shares closed below $1 in a row, and the acquisition of NASDAQ was delisted.

On Aug. 17, Faraday Future announced that at a special shareholders' meeting, shareholders had approved a proposal to empower the company's board of directors to carry out a reverse equity split of the company's issued common stock, between 1:2 and 1:90. If a partnership is implemented, it will increase the number of authorized and unissued common shares. Prior to that, Faraday's future share price remained below $1, well below the Nasdaq listing standard. After the partnership, Faraday's future share price returned to more than $1, but it has continued to fall since then. Affected by the news, Faraday's future share price soared 25.57% on the same day to close at $0.28 per share, with a total market capitalization of $409 million.

On Aug. 17, Faraday's future share price was $22.00, but it had fallen to $1.05 as of the latest trading day, plunging 95% in just 30 trading days, leaving a market capitalization of just $19.53 million, the lowest since Faraday's future IPO went public.

FF shares closed at $1.05 on Oct. 13, leaving a market capitalization of just $19.53 million, the lowest since the Nasdaq IPO closed in July 2021. According to Nasdaq delisting rules, when the share price of a listed company is less than $1 for 30 consecutive trading days, that is, it meets the delisting criteria. If the current momentum develops, FF is likely to face the risk of delisting again.

In order to avoid delisting, Jia Yueting said that FF is formulating a series of measures to defend the interests of shareholders, including: 1. Sign Shareholder Intelligence Services LLC, a service provider of listed companies, to obtain, summarize, track and analyze shareholder trading information, and investigate potential illegal short selling; 2. Increase holdings at the core of the company; 3. Introduce potential strategic investors. 4. Upgrade the organization to meet the opportunities and challenges of the company entering a new stage of development; 5. Continuously reduce operation and supply chain costs to achieve all strategic goals, including rapid capacity increase; 6. A large number of professional media are invited to visit FF to experience products and technology in depth, so that outsiders and investors can better understand the development status and true value of FF.

In addition, Faraday Future announced in September that a number of executives had voluntarily signed salary cuts and share purchase agreements, including founder Jia Yueting and the new CEO Matthias Aydt, Chen Xuefeng, China CEO, Jonathan Maroko, interim chief financial officer, and Yun Han, chief accounting officer. Faraday said in the future that executives agreed to buy shares in the company at half their salary within three months. The shares will be locked up for at least 180 days from the date of issue. As for the plan to cut pay and buy shares in the future, Faraday said: "after reviewing the company's share price performance, management believes that Faraday's future share price is undervalued by the market. So executives hope to sign these agreements to show their commitment and confidence in the company."

Faraday's future new car was finally delivered earlier this month. In the third quarter of this year, FF delivered a total of three FF 91 2.0 Futurist alliance. FF delivered the FF 91 2.0 Futurist alliance to Jia Yueting on October 9, revealing that the next owner is the most Top king of American pop music in the world, the founder of a popular music style around the world, and the winner of many international music awards, such as the Grammy and MTV Music Awards.

Although FF has been in mass production and delivery has been completed, but at the current rate of delivery, it will take a long time to break even. In addition, FF is still short of money, with FF losing $270 million in the first half and Faraday's future cash flow of $180 million as of June 30, 2023. Therefore, if FF wants to make a new round of delivery, it still needs to rely on financing, and how much money FF needs to solve the delivery problem is not clear, nor is it certain that Faraday will have a future.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat