Electric vehicle manufacturer Fisker saw its stock price plummet by more than half on Thursday. This dramatic drop followed a report from the The Wall Street Journal, citing people familiar with the matter, which claimed that Fisker had hired restructuring advisors to assist in a potential bankruptcy filing. Unsurprisingly, the news sparked concerns among investors, who now fear that Fisker might be preparing to seek bankruptcy protection.
Fisker had a challenging start to 2024, finding itself among the EV startups struggling to establish a foothold in the automotive industry. With its stock already down 97 percent since 2020, the value of the startup’s shares plummeted from 32 cents per share on Wednesday to less than 15 cents per share on Thursday. That marks the largest single-day decline in the young company’s history.
Fisker Responds
In an effort to address investor concerns, Fisker executives issued a statement late Thursday evening. In it, they emphasized that the company routinely engages with various advisors and that its primary focus remains on finalizing a partnership with another automaker.
The statement, as seen by MarketWatch, stated that Fisker does not comment on “market rumors and speculation,” but “often” collaborates with external advisors to help manage the business “and assist in developing and executing strategies.”
“Fisker is focused on raising additional capital and engaging in a strategic partnership with a large automaker,” the statement said. “The plan to shift its direct-to-consumer strategy to a dealer model is also still on track. The leadership team is laser-focused on these efforts,” Fisker added.
More: EV Startup Fisker Reportedly Gearing Up For A Possible Bankruptcy
The report from The Wall Street Journal indicating that the company had enlisted the services of FTI Consulting and the law firm Davis Polk to assist with bankruptcy proceedings followed a “going-concern” warning from the company in February. At that time, Fisker stated there was “substantial doubt” about its ability to remain in business and announced it was actively seeking cash from investors for a manufacturing partner in the U.S. Additionally, it revealed plans to reduce its staff by 15 percent.
The trouble follows a promising 2023 in which Fisker started deliveries of its first vehicle, the Oceann SUV Although the vehicle brought in $273 million in sales, that pales in comparison to the more than $1 billion in debt weighing on the company.
Adding insult to injury, the launch of the Fisker Ocean hasn’t gone smoothly. One of YouTube’s most popular tech reviewers, Marques Brownlee, called the SUV the worst vehicle he’s ever reviewed, and owner complaints have been rolling in for months.
The National Highway Traffic Safety Administration announced in February that it was investigating the Ocean over complaints that the vehicle could roll away when parked and might not shift into Drive, among other issues.
Fisker’s difficulties could not have come at a worse time. All EV manufacturers are struggling as high interest rates and concerns over affordability have put immense pressure on the segment. While established automakers are able to weather the difficulties, startups like Lucid and Rivian are suffering. Fisker may just be the first of them to actually collapse.
