Fisker, the electric-vehicle startup, faces mounting challenges as talks with a large automaker for a potential deal have collapsed, leading the New York Stock Exchange (NYSE) to plan the delisting of its shares due to “abnormally low” price levels.
The NYSE suspended trading in Fisker’s stock on Monday, hours after it was halted pending an announcement. Fisker’s shares were trading at $0.09 before the halt and closed at $0.13 on Friday.
The termination of talks with the unnamed automaker has forced Fisker to explore strategic options, including in- or out-of-court restructurings and capital markets transactions. The company stated that in the case of a stock delisting, it will be required to offer to repurchase its unsecured 2.50% convertible notes due 2026, triggering an event of default under its senior secured convertible notes due 2025.
Fisker’s struggles to raise funds have intensified, with the company admitting it will be unable to meet a closing condition related to its attempt to raise up to $150 million by selling convertible notes after missing an interest payment. The startup said it did not pay the $8.4 million payment for some notes due in 2026 on March 15, despite having enough liquidity, as it wanted to use the 30-day grace period to talk to investors about its capital structure.
The news comes a week after Fisker paused electric-vehicle production, adding to growing uncertainty around its future. A potential bankruptcy would make Fisker the second failed auto startup from Henrik Fisker, who started his career as an automotive designer and was also a Tesla consultant. His previous attempt, Fisker Automotive, filed for bankruptcy in 2013 despite fetching $192 million in loans from the Department of Energy.
Fisker, founded in 2016, went public through a merger with a blank-check firm for a valuation of $2.9 billion. However, supply chain issues, production delays, and fundraising hurdles have sent its market valuation crashing to less than $100 million. The company has pivoted to a dealer-partner model and relies on auto supplier Magna to assemble its vehicles.
The Fisker Ocean, its flagship model, competes with Tesla’s Model Y SUV and other mid-size electric SUVs. The company’s shares have lost more than 90% of their value this year, prompting it to propose a reverse stock-split at a shareholder meeting on April 24 to comply with the NYSE’s listing norms.
