Fisker's Financial Struggles Intensify, Faces Delisting and Explores Restructuring Options

Fisker Inc FSR is facing delisting from the New York Stock Exchange due to its share price falling to “abnormally low” levels, with trading suspended shortly after. 

This development follows the collapse of potential deal talks with a giant automaker, pushing Fisker to explore strategic alternatives, including restructuring and capital markets transactions. 

The failed negotiations have triggered a need for Fisker to possibly repurchase its convertible notes due in 2026 and 2025, raising concerns about a default event that could significantly impact its operations and financial health. 

This situation exacerbates the challenges for Fisker, which has already paused its electric vehicle production amid increasing uncertainties about its viability, according to Reuters reports. 

Thomas Hayes, chairman of Great Hill Capital, has indicated that bankruptcy protection filing seems inevitable for Fisker, which would mark the second failure for founder Henrik Fisker in the automotive startup space.

Fisker, established in 2016 and going public through a special purpose acquisition company (SPAC) merger, initially boasted a $2.9 billion valuation. 

However, the company’s value plummeted below $100 million due to supply chain issues, production delays, and funding challenges. Efforts to raise up to $150 million through convertible note sales faltered after missing an interest payment, underscoring the difficulty of securing funds in a competitive and challenging market.

The startup has also proposed a reverse stock split to meet NYSE listing standards, reflecting its over 90% share value loss this year. 

The stock lost close to 99% in the last 12 months. Investors can gain exposure to the stock via Direxion Moonshot Innovators ETF MOON and Invesco WilderHill Clean Energy ETF PBW.

Price Action: FSR shares closed lower by 28.2% at $0.09 on Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy of Fisker