Fisker (FSR) released a ton of bad news during its fourth quarter earnings report yesterday, shocking investors and Wall Street analysts.
Fisker said that given the company's financial condition, evolving dealer sales approach and challenging EV market, there are “significant questions about the company's ability to continue as a going concern” when it files its 2023 official financial statements. reported. The number of employees decreased by 15%.
Fisker said it had $396 million in cash at the end of the fourth quarter, $70 million of which was restricted. Fisker is in negotiations with current bondholders for additional investment in the company, and said it is “a major automaker regarding a potential transaction that could include an investment in Fisker and the co-development of one or more electric vehicle platforms.” We are negotiating with the manufacturer.” , North American Manufacturing. ”
Reuters reported on Friday afternoon that Fisker was in preliminary talks with Nissan for a $400 million cash injection that would give Nissan access to Fisker's next truck platform.
Fisker CEO and Chairman Henrik Fisker said in an interview with Yahoo Finance that negotiations with automakers are progressing, but he neither confirmed nor denied that the other party is Nissan. Neither did I.
“What we said is that we are [in] Negotiations with OEMs [original equipment manufacturers] “For electric vehicle development and American manufacturing and investment. We started talking to a few OEMs, I think over six months ago, and obviously have already done a lot of work,” Fisker said. So I hope this deal will happen.” We plan to close as soon as possible and are currently working on it. ”
Talk of cash infusions and strategic alliances with established automakers was welcome news, but it wasn't enough to allay doubts about Mr. Fisker's shaky state. The EV maker's stock price fell nearly 34% on Friday, and the stock has now been stuck at less than $1 since early January.
Fisker is optimistic about the future despite concerns about its lack of funding and its non-compliance with NYSE rules because its stock trades below $1.
“I would say [despite] Although the general EV recession continues, there is still significant interest in our vehicles. “The EV market has been tough in recent months, but we believe that pivoting to a dealer model will actually accelerate sales more than ever before,” Fisker said. Sales increased by 250% from Q3 to Q4, and the current forecast is for sales to continue to increase despite the EV slump. ”
Wall Street reacts to Fisker's outlook
Citi analyst Itai Michaeli generally feels that Fisker's only product, the Ocean EV, has a future, and is not surprised that major automakers are interested in investing in Fisker. But this alone is not enough to maintain confidence in Fisker.
“Securing such an agreement is likely to be a major positive for Fisker, but it is difficult to support an investment thesis based entirely on this, and we remain committed to making further progress on this front to date.” I wish I had seen it,” Michaeli wrote in a note. To all investors. Michaeli downgraded his stock to Neutral/High Risk (equivalent to Hold) and lowered his price target from $4 to $0.80.
In the fourth quarter, Fisker had revenue of $201 million, below the Bloomberg consensus estimate of $272.9 million, and a net loss of $463.6 million, an expected loss of $82.7 million. reported that it was significantly higher.
Fisker's challenges launching a direct-to-consumer model led it to seek traditional dealer partnerships, and the company revealed it currently has 12 dealer partners and more than 250 dealers interested. .
While talk of new partnerships and a dealer distribution network is promising, the main concern for investors is Fisker's lack of cash.
“If the company had sufficient liquidity through 2025, the risk/reward here would likely be interesting, as the stock is under significant pressure,” Michaeli wrote. “But with the liquidity runway narrowing and accounting/reporting issues still unresolved, it is difficult to bring investment cases to such poor people here.” [near-term] Visibility. ”
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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