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Bankruptcy not unlikely:
Fisker founder
Henrik Fisker
presented the all-electric compact hatchback Pear on August 3rd of last year, 2023, during the first "Product Vision Day" in California
Photo: FREDERIC J. BROWN / AFP
The cash-strapped US electric car start-up Fisker is finding itself in increasingly severe turbulence. Just over a week ago, the company announced that it would suspend production of its Ocean model at contract manufacturer Magna in Austria for six weeks. Fisker previously owed $8.4 million in interest on convertible notes. At the same time, Fisker stated that the company was negotiating a collaboration with a car manufacturer.
These negotiations have now failed, as the start-up announced on Monday before the US stock exchanges opened, but did not name any names. According to rumors it was Nissan. “I can't say whether it's next week or next year, but it's inevitable,” Reuters news agency quoted
Thomas Hayes
, head of hedge fund Great Hill Capital, as saying about a possible Fisker bankruptcy.
Trading in the shares, which are now just a penny stock, was suspended on Monday. Fisker securities have already lost more than 90 percent of their value this year. In order to be able to comply with the regulations for a stock exchange listing on the US technology exchange Nasdaq, Fisker wants to have a reverse stock split voted on at the shareholders' meeting on April 24th.
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Production suspended
: Ocean model from Fisker
Photo: Andrej Sokolow / picture alliance / dpa
The electric car manufacturer, which was founded by Danish car designer Henrik Fisker, has been in financial difficulties for a long time and pointed out the risk of possible bankruptcy in February. According to its own information on Monday, the company is also unable to meet all the conditions for a new convertible bond deal. The start-up wanted to raise $150 million in fresh capital this way.
Cash has shrunk massively
Fisker is among the electric car startups that went public at the start of the decade, many through mergers with special purpose acquisition companies (SPACs), which helped accelerate their rollouts. Their rise was due to the hope and enthusiasm of investors that the young electric car companies could one day follow Tesla and gain a foothold in the highly competitive automotive industry.
As of just over a week ago, the company's cash reserves had dwindled to around $121 million - less than a third of what was available at the end of last year. Fundraising has become difficult for loss-making electric car start-ups as they have little revenue to ramp up production and deliver to customers. At the same time, companies are struggling with tough competition, slowing demand and a difficult economic situation.
According to the Wall Street Journal, Fisker is said to have had sales of $273 million last year - with debt of more than $1 billion.
rei with Reuters