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Faraday will be removed in the future!

2024-06-25 Update From: AutoBeta NAV: AutoBeta > News >


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On April 30th, Faraday Future (FF) posted an announcement on its website that the company had received a letter from the Nasdaq exchange that the Nasdaq exchange had decided to delist the company from the capital market because its shares closed at $0.10 or less for 10 consecutive trading days.

In response, Faraday said in the future that the company intends to request a hearing before May 1, 2024 (the latest allowed date) to appeal against the delisting ruling, which will suspend trading for 15 days from the date of the request. During this period, the company's securities will continue to be listed on the Nasdaq capital market.

In fact, Faraday has been warned of delisting many times in the future.

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 October 31, 2022, Faraday received a letter from Nasdaq that its shares did not meet the requirements of Rule 5550 (A) (2) of the Nasdaq listing rules, that is, the share price should be above $1 for 30 consecutive trading days. The notice has no immediate impact on Faraday's future listing of common shares on NASDAQ, and the company has 180 days to re-comply.

In order to ensure compliance, Faraday's future approach is to "reverse split shares", that is, by reducing the equity, to increase the net worth of stock units. In August, 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. It is understood that Faraday's future share price is $22.00 after the partnership, but the share price plunged 95% in just 30 trading days, falling below $1 again.

According to the Nasdaq delisting rules, when the share price of a listed company is less than $1 for 30 consecutive trading days, it meets the delisting criteria, and as early as December 28, 2023, the Nasdaq Exchange informed the company that the closing price of its listed securities was less than $1.00 per share for the past 30 working days, which does not meet the listing rules 5550 (a) (2), but Faraday will have 180 days in the future. Until June 25, 2024, re-comply with the listing rules, otherwise it will be forced to delist. As of April 29, 2024, Faraday shares closed at $0.0418, leaving a total market capitalization of just $1.7837 million, the lowest since the Nasdaq IPO.

In other words, today (April 30) is the last day for Faraday to be listed on the capital markets, and trading will be suspended for 15 days from May 1. If Faraday fails to return the share price to $1 by June 25, 2024, it will eventually be forced to delist.

In 2023, Faraday will deliver a total of 11 FF 91 vehicles in the coming year. In March, Faraday recalled 11 FF 91 2.0 delivered in 2023 to NHTSA because software errors may prevent the airbag failure warning light when the airbag control unit (ACU) detects a system failure, the driver will not be warned that ACU will lose communication failure, and if the airbag ejects correctly during the collision, it may increase the risk of occupant injury. In view of the above defects, Faraday will upgrade the iHUB module software update through OTA in the future.

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. 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.

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