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Fisker (FSR) released a ton of bad news during its fourth quarter earnings report yesterday, shocking investors and Wall Street analysts.
Fisker said that given the company’s financial condition, evolving dealer sales approach and challenging EV market, there are “significant questions about the company’s ability to continue as a going concern” when it files its 2023 official financial statements. reported. The number of employees decreased by 15%.
Fisker said it had $396 million in cash at the end of the fourth quarter, $70 million of which was restricted. Fisker is negotiating with current shareholders for additional investments in the company, including “an investment in Fisker, joint development of one or more electric vehicle platforms, and manufacturing operations in North America.”
Talk of cash infusions and strategic alliances with established automakers was welcome news, but it wasn’t enough to allay doubts about Mr. Fisker’s shaky state. The company’s stock price fell more than 40% in early trading and has now traded below $1 since early January.
Citi analyst Itai Michaeli generally feels that Fisker’s only product, the Ocean EV, has a future, and is not surprised that major automakers are interested in investing in Fisker. But this alone is not enough to maintain confidence in Fisker.
“Securing such an agreement is likely to be a major positive for Fisker, but it is difficult to support an investment thesis based entirely on this, and we remain committed to making further progress on this front to date.” I wish I had seen it,” Michaeli wrote in a note. To all investors. Michaeli downgraded his stock to Neutral/High Risk (equivalent to Hold) and lowered his price target from $4 to $0.80.
In the fourth quarter, Fisker had revenue of $201 million, below the Bloomberg consensus estimate of $272.9 million, and a net loss of $463.6 million, an expected loss of $82.7 million. reported that it was significantly higher.
Henrik Fisker, Chairman and CEO It was a year.” “There were many unforeseen challenges, including rising interest rates, finding enough skilled labor, and locating the right real estate to make the DTC model work effectively.”
Fisker’s challenges launching a direct-to-consumer model led it to seek traditional dealer partnerships, and the company revealed it currently has 12 dealer partners and more than 250 dealers interested. .
While talk of new partnerships and a dealer distribution network is promising, the main concern for investors is Fisker’s lack of cash.
“If the company had sufficient liquidity through 2025, the risk/reward here would likely be interesting, as the stock is under significant pressure,” Michaeli wrote. “But with the liquidity runway narrowing and accounting/reporting issues still unresolved, it is difficult to bring investment cases to such poor people here.” [near-term] Visibility. ”
Programming Note: Watch live coverage from Henrik Fisker, Chairman and CEO of Fisker. Yahoo Finance Today at 4pm ET.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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