Montage: EV

Fisker CEO criticizes Morgan Stanley analyst following the Q2 Results Report

Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter

On August 5, Morgan Stanley analyst Adam Jonas lowered the firm’s price target on Fisker shares from $15 to $10 while downgrading the rating from Overweight to Equalweight.

Fisker CEO posted Wednesday on his Instagram account a screenshot from Fisker’s Q2 Financial results asking the analyst for a correction in his latest report regarding “modeling error & assumptions” about the company.

“Mr. Adam Jonas @morgan.stanley, when are u going to correct ur team’s recent research report modeling error & assumptions about @fiskerinc,” Henrik Fisker wrote.

Last week, Jonas said the EV maker is “in a situation where access to capital in the next 6 months would be highly deterministic to the company’s fundamental performance” estimating the need to raise between $0.5 billion and $1 billion by early 2023.

“We covered largely in-line results and a reiterated start of production (SOP) and cash burn guide in our reaction note. In this note we update our earnings forecasts and price target to reflect the need for substantial outside capital (we estimate between $500mm and $1bn by early next year) in order to fund the ramp of the Ocean, as well as development/capex related to other products we have given Fisker credit for in our forecasts,” the analyst said.

In addition, the analyst warned of the continuing macro and geopolitical risk including the European gas shortage risk elevating the near-term execution risk considering Fisker‘s vehicles will be produced in Gratz, Austria.

“While the supply chain situation may be improving, and the company may be benefiting from easing material costs and a weak Euro, we believe the company is in the situation where access to capital in the next 6 months would be highly deterministic to the company’s fundamental performance. Continuing macro and geopolitical risk, compounded by European gas shortage risk (100% of Fisker’s production is in Austria) elevates the near term execution risk”.

“As such, we now assume FSR raises $1bn in 4Q22 at the current share price of $10/share compared to a $1.5bn debt raise in FY23 that we modeled previously, creating substantial dilution. This, coupled with a more modest outlook for volume through 2030, reduces our price target to $10 (vs. $15 previously) and rating to EW vs. OW previously.”

On August 3, Fisker reported its second quarter earnings results where it confirmed the sold-out of the 5,000 units special units for the Ocean model amid a non-refundable $5,000 reservation.

The company said it has over $850 million of cash and cash equivalents reflecting its “prudent liquidity management and is sufficient to fund the production launch of the Fisker Ocean in November 2022 and for additional vehicle development throughout 2022”.

“We are delighted to announce that the 5,000 limited edition Fisker Ocean One pre-order units are completely sold out, thanks to pioneering customers in all nine launch markets: Austria, Canada, Denmark, France, Germany, Norway, Sweden, United Kingdom, and the United States,” Henrik Fisker, Fisker CEO stated.

Earlier in the week, Fisker CEO unveiled that the upcoming Ocean Model will bring streaming apps like Youtube, Disney+, and Amazon Prime Video but also the web browser Google Chrome.

Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter

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