Fisker pauses production, secures $150M financing commitment
Fisker (FSR) shares are continuing their decline after announcing on Monday that it was pausing production for six weeks. The EV maker also revealed that it secured a $150 million funding commitment from an existing investor.
Yahoo Finance's Pras Subramanian explains the move in the video above.
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Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
- Well, Fisker shares are plunging today down more than 12% there. This comes after more bad news for the EV maker. The company announcing it is pausing car production and looking to raise $150 million. To break this down for us, we've got our very own, Pras Subramanian. Uff, Pras, you look at that stock. Move I mean, we're talking $0.15 a share at this point, right? Six week pause, what does that buy Fisker and is that enough time to get their finances in order?
PRAS SUBRAMANIAN: Well, I think it's bought itself some breathing room here with this $140 million of new funding coming from an existing investor to be doled out across four different tranches, and then also, according to some sort of conditions need to be needing to be hit in particular filing that 10-- that's been delayed. So I think that's the positive here. The bad news, like you mentioned, is that the company has paused production now for six weeks to kind of better align with demand. They had produced around a thousand vehicles this year and have 4,700 vehicles in inventory. So they have a bit of supply there to kind of go through. The company also reiterated to Kiko, that it's in talks with a large manufacturer again for a potential transaction or partnership. Last week, Reuters had said that it could be Nissan that's who they were talking to. We'll see, but, Yeah, I think outside of a partnership or a new fundraising or something positive, it's going to be hard here for Fisker to, you know, keep its shareholders happy here who have seen a massive decline in the value. And I think the company is trying to keep going here, and we'll see what happens with this new funding and potentially a partnership.
- And we know, Pras, that we've talked about production delays plaguing Fisker before, but also some on the good side, the things that it does have going for it its intellectual property. How well positioned do you think it is, then, for some of these carmakers that you've mentioned there to take Fisker on?
- Well, according to Reuters there was talk that Nissan was interested in some of the other Fisker's other platforms. For instance, they have an EV pickup coming in the future, and a couple of other smaller vehicles. I think that's sort of what was exciting to them. You know, Nissan is sort of, I don't want to say rebooting here, but their current ARIA EV is not sold that well, and they've been offering extensive discounts and incentives to move those cars off the lot. So, potentially, they see this as an exciting way to amp up their offerings, which I think, and I think many automakers believe, might be a little hiccup here with EV demand. But potentially, it's going to go that way in the future mid-decade, and a decade, that's where we see more of these sales. So Fisker does have some value there in terms of their intellectual property. And plus, they have, like I said, 4,700 EVs in inventory, which the company says is worth around $200 million.
- I certainly see if they can get into the hands of some eager buyers perhaps. I appreciate you getting us up to speed there our very own Pras Subramanian.
