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.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
