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(Reuters) – Electric vehicle (EV) startup Faraday Future Intelligent Electric said on Sunday it plans a 3-for-1 reverse stock split to regain compliance with listing requirements.
The reverse stock split is scheduled to take effect on February 29, and will be the company’s second stock reversal in the past five months, after it wiped out nearly 99% of its market capitalization last year due to lack of funds and supply chain issues.
The company’s stock closed at $0.09 on Friday, giving the company a market value of about $11 million.
Nasdaq in December put the California-based company at risk of delisting after its shares traded below the exchange’s minimum trading price of $1 for 30 consecutive days. A notice was sent warning.
Faraday Future, which has suffered years of production delays, reported a loss of $78.05 million in the quarter ending September.
Growth in the global EV market is expected to slow to 27.1% this year from an estimated 29% in 2023, according to a January forecast by research firm Canalys.
Shares of fellow EV company Nikola are also trading below $1, down from a high of $80 a few days after going public in June 2020, and are on the verge of delisting.
Faraday Future CEO Matthias Eit said on Monday that the company is focusing on cash flow break-even points rather than production volumes to avoid the rapid expansion of production scale that has been a problem for many of its competitors. We are prioritizing that.”
The comments came just days after rivals Rivian Automotive and Lucid Group predicted lower-than-expected production in 2024 as they grapple with stagnant EV demand.
(Reporting by Priyanka.G in Bengaluru; Editing by Tasim Zahid)
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