Fisker stock plummets, trading halted as EV maker loses potential bailout

Sheri Walsh
·2 min read
7
UPI
Traders work on the floor of the New York Stock Exchange on Wall Street in February. On Monday, trading for EV car maker Fisker was halted after the company stock plummeted 28%. Photo by John Angelillo/UPI

March 25 (UPI) -- Fisker revealed Monday that talks with a "large automaker" for a possible rescue investment have collapsed, as the California-based electric vehicle manufacturer's stock plummeted 28%, before trading was halted.

Fisker said "an announcement" is pending, according to Monday's regulatory filing that said the unnamed automaker ended negotiations last Friday.

"After the market closed on March 22, Fisker Inc. received noticed from the large automaker, with which the company had been in negotiations for a potential transaction, that the automaker terminated the negotiations. Following such termination, the company continues to evaluate strategic alternatives," the filing states.

While Fisker has not named the "large automaker," there were reports that Nissan was interested in partnering with the cash-strapped EV company.

Last week, Fisker paused production of its electric Ocean SUV, as the company's cash reserves dropped to just $121 million in cash, according to a separate filing on March 15 with the Securities and Exchange Commission.

One of the closing conditions for a possible $150 million convertible note was to keep the negotiations going. In Monday's filing, Fisher said it will ask the unnamed investor to waive the condition.

"As a result of the inability to meet such closing condition, the company intends to engage in discussions with the investor regarding a waiver of such closing condition," the filing states.

Last year, Fisker announced it would adopt Tesla's charging network, 12,000 stations in the North American market, starting in 2025. Since then, the EV startup has struggled to sell its Ocean SUV, as some delivered vehicles have experienced quality issues.

In February, Fisker laid off 200 people, which is about 15% of its staff.

Last week, the company missed an interest payment and halted production, after reporting it had only $121 million in the bank. Fisker also warned investors it would not survive a year without outside investment.

According to Monday's filing, Fisker said it will evaluate other "strategic alternatives," including "in or out of court restructurings, capital markets transactions, repurchases, redemptions, exchanges or other refinancing of its existing debt, the potential issuance of equity securities, the potential sale of assets and businesses and/or other strategic transactions and/or other measures."