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A new force will be delisted!

2024-04-13 Update From: AutoBeta NAV: AutoBeta > News >


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On March 25, Fisker announced that it had received notice from the big automaker it had previously negotiated a potential deal with, which had decided to end the talks. Fisker said that as a result, the company will not be able to meet the closing conditions of a financing commitment and term letter signed with an investor on March 18, and intends to discuss with the investor to waive this condition, and the company will continue to evaluate strategic alternatives such as in-court or out-of-court restructuring and capital market transactions.

Although Fisk has not disclosed the specific name of the "big automaker,"but the industry rumors are likely to negotiate with Nissan. If Fisk succeeds in reaching a financing agreement with Nissan, it will provide the former with the necessary financial support and could accelerate cooperation on electric vehicle technology and market expansion. However, also on March 25, Nissan updated its future electrification development plan, announcing that it will launch 30 new cars in the next three years, including 16 electric models and 14 internal combustion engine models, with the goal of increasing global sales by 1 million vehicles within three years from fiscal 2023, but the commercial content did not mention anything about Fisk. That night, Fisk received "a major automaker"termination of negotiations notice, and with the termination of negotiations between the two sides, Fisk's survival situation has become confusing.

Affected by the news, Fisk shares fell 29.6% in pre-market trading, hitting an all-time low of $0.086. The New York Stock Exchange (hereinafter referred to as "NYSE") issued an emergency announcement that Fisker's share price is no longer suitable to continue trading on the NYSE due to the unusually low share price, immediately suspended trading, and will initiate Fisker stock delisting process. At the close, Fisker shares fell 28 percent to close at $0.090, leaving a total market value of only $48.165 million. Fisk shares have been trading below $1 for 30 consecutive trading days, not in line with the NYSE's listing and trading rules.

It is understood that Fisk successfully landed on Nasdaq in October 2020 through a reverse takeover under the symbol FSR, and its share price rose 13% to $10.14 on the day of listing. After that, Fisk just caught up with the development of electric vehicles in the United States, the highest share price rose to $31.96, and with the pressure on performance and development prospects, including Lucid, Rivian and other new American forces began to face survival crisis, the stock price fell again and again. Historically, Fisk's share price fell 53.78% for the year in 2022 and 75.93% in 2023, compared with 94.88% to $0.090 in 2024 as of Feb.26.

On February 29, Fisk released its 2023 financial report showing that the company achieved revenue of USD 273 million during the reporting period, compared with USD 342,000 in the same period; operating loss of USD 417 million, compared with USD 530 million in the same period; net loss of USD 762 million, compared with USD 547 million in the same period; As of December 31, 2023, Fisk held $325 million in cash and cash equivalents and $70.45 million in restricted cash.

Fisk produced more than 10,000 vehicles in 2023, but delivered only about 4,700 vehicles. Fisk plans to deliver between 20,000 and 22,000 Ocean electric vehicles in 2024, down from the expected 35,600. The company said its current resources were "insufficient"to support its operations over the next 12 months. Without additional financing, Fisk said it could be forced to reduce Ocean production, reduce investment, scale back operations and lay off further workers.

Now, Fisker is at a critical moment. Fisker has hired FTI Consulting and Davis Polk law firms to assist it in filing bankruptcy, according to the Financial Union, citing the Wall Street Journal. People familiar with the matter complained that Fisker could close to cash this year, issuing a going concern warning last month, saying there were "significant doubts"about its ability to continue as a going concern.

In fact, Fisker isn't the only one in trouble, but also the once-hot Rivian and Lucid. Both companies reported disappointing results.

On Feb.21, Rivian released annual results showing revenue of $4.434 billion in 2023, up 167% year-on-year, but also lost $5.432 billion. In its earnings report, Rivian announced that it would cut 10% of its workforce in response to the tough electric vehicle market. Rivian delivered 50,100 new vehicles in 2023, significantly lower than market expectations. Tesla CEO Musk said that on the current trajectory, Rivian would go bankrupt in about six quarters, adding that "maybe that trajectory will change, but not so far." As of December 31, 2023, Rivian had $7.9 billion in cash reserves on its books.

Lucid's situation is not good either. The financial report showed that Lucid had a net loss of $2.83 billion in 2023, an increase of 117% year-on-year. Lucid expects to produce 9,000 vehicles this year, well below analysts 'expectations of 14,000. Last year, the company produced 8,428 vehicles, a net loss of $2.83 billion, and Lucid lost about $336,000 for every car it produced last year.

A few years ago, Rivian, Lucid and Fisker, the new U.S. car-making forces, all had a lot of glory, and the market value of these U.S. electric carmakers once challenged Tesla amid rising investor interest. However, today's situation is not so optimistic. After the beginning of 2024, the new force of car-building "reshuffle of life and death"will be staged around the world. According to a survey of the financial situation of 10 new U.S. car-making companies by Automotive News, most are facing cash flow constraints, with only four companies having enough cash on hand to operate for more than a year.

At present, China is the world's largest automobile market, but also the world's largest new energy vehicle market, more and more overseas brands hope to make achievements in the Chinese market, but the current performance of the Chinese market, in addition to Tesla, other overseas brands of new energy vehicles performance are very general. At present, the competitive environment facing China's electric vehicle market is very different from Tesla's when it first entered China. At that time, Tesla was unique. Now the car-building power pattern has been initially stable. Traditional automakers 'new energy brands are making efforts. Other overseas brands want to take a piece of the fierce Chinese market and need to be prepared for long-term battles. Earlier, Fisker announced that it would open its first delivery center in China in 2023 and deliver Fisker Ocean to Chinese users in the first quarter of 2024, a move that may not be possible with stock delisting and cooperation collapse.

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