How much trouble is electric vehicle (EV) maker Fisker in? Its stock has dropped from $6 last October to $0.03. Yes, that’s three cents. It recently pulled its earnings guidance, said it is looking at “strategic options” and faces a federal investigation of one of its braking systems.
Fisker recently said it may not be able to pay its debts. It also said negotiations with a larger car company to rescue it have ended. Moreover, The Wall Street Journal reported, “Fisker said its options may include restructurings, capital markets transactions, refinancings or sales of assets, among other things.”
Fisker’s recent decision to file for bankruptcy in Austria may be a sign of things to come. Although it said it would continue to operate in the EU nation, it is hard to tell where the necessary capital will come from.
Fisker almost certainly will not survive as an independent company. Since it has not found a buyer, liquidation is the most likely end. However, Fisker does not have much to liquidate.
Fisker’s trouble shows other small EV companies that falling sales in the sector may take other companies with it. Lucid Group Inc. (NASDAQ: LCID) and Rivian Automotive Inc. (NASDAQ: RIVN) are on the list. They face Tesla Inc. (NASDAQ: TSLA) and every major car company in the world. Tesla has issues of its own. Its shareholders need to decide about a very rich comp package for CEO Elon Musk.
Fisker will be the first of several EV companies that will not make it.
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