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Fisker has reportedly hired “restructuring advisers to help with a possible bankruptcy filing,” according to the Wall Street Journal on Wednesday.
Update: Fisker responded with a statement, included below.
Fisker has been going through a tough time lately, and its stock may have been delisted due to low share prices. He also indicated in his recent quarterly report that there were “substantial doubts” that he could continue operating and that he was seeking outside investment. This despite a 300% increase in deliveries in the fourth quarter, quite an achievement from one quarter to the next.
And not long after Fisker’s quarterly report, there was news that they may have found that outside investment in the form of “advanced” talks with Nissan, which is reportedly seeking a partnership on electric trucks. Fisker unveiled a future truck, called the “Alaska,” last year, and that truck looks a lot like a Nissan Frontier.
Fisker also recently announced two other future vehicle designs, the compact Pear and the sporty Ronin.
Fisker has claimed to make money from the sale of its Ocean SUV (see our review here), due in part to its contract manufacturing method through Magna Steyr. While this means lower margins, since some of the margin goes to the manufacturer, it also helps keep upfront costs low, since Fisker doesn’t need to invest in billion-dollar factories like Rivian or Tesla are doing.
However, there are still significant costs associated with running the company and with the direct sales model, which Fisker has found difficult to scale. To the point that Fisker recently announced a recall of the model and said the company would hire dealer partners to help sell its car inventory, which it estimated at about $530 million as of March 1.
But today Fisker was dealt another blow, in the form of a report in the Wall Street Journal claiming that the company has hired financial advisor FTI Consulting to help with a possible bankruptcy filing. As a result of the report, shares of Fisker (FSR) are currently down 45% in after-hours trading.
Update: Fisker issued a statement in response, after the market closed on Thursday:
“As a matter of company policy, Fisker does not comment on market rumors and speculation. However, Fisker often works with outside advisors to help manage its business and assist in the development and execution of strategies. Fisker is focused on raising additional capital and establishing a strategic partnership with a large automaker. The company also continues its transition to a partnership model with distributors in both North America and Europe. “The leadership team is very focused on these efforts.”
As a result, FSR shares, which closed down 52% on Thursday, later rose above 42% in after-hours trading, recovering to 22 cents per share in after-hours trading on Thursday, after closing yesterday at 33 cents per share. The reason for this recovery appears to be Fisker’s mention that he was seeking a “strategic partnership with a large automaker,” which had been previously reported as mentioned in the article above.
Electrek’s opinion
The WSJ sought “people familiar with the matter,” and while the outlet generally has good business reporting, its history of spread climate disinformation. After all, it is owned by a climate denierRupert Murdoch, who interferes with your media push a anti-environmental agenda. For example, in the same article, the WSJ falsely claims that demand for electric vehicles is “flagging,” even though electric vehicle sales continue to rise.
Regardless of this particular inaccuracy, there are still issues with Fisker, so it’s quite credible that the company is seeking consulting, especially after the recent quarterly report that warned this could be possible. In our opinion, this does not mean that Fisker is necessarily file for bankruptcy, but rather seek an analysis as to whether it would be the most beneficial path forward. We will have to be attentive and know what path the company decides to take.
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