Written by Cláudio Afonso | LinkedIn | X
Shares of electric vehicle maker Fisker plummeted over 55% on the OTC market on Tuesday, falling below $0.02 and bringing year-to-date losses to nearly 99%.
The company stated that “faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently”.
On late Monday, the company co-founded by the automotive designer Henrik Fisker disclosed that it had filed for Chapter 11 bankruptcy protection in the District of Delaware on June 17.
Fisker is currently in advanced negotiations with financial stakeholders concerning debtor-in-possession financing and the sale of its assets, according to a company statement.
The bankruptcy filing reveals that Fisker’s assets are valued between $500 million and $1 billion, with liabilities ranging from $100 million to $500 million. This filing provides Fisker with protection from creditors as it formulates a plan to repay its debts.
Over the last months, Fisker was taking drastic measures to avoid bankruptcy, including significant workforce reductions. A major layoff was recently announced to U.S. employees and was swiftly extended to Canadian operations, leaving the company with a minimal staff.
In an official statement, Fisker stated that “intends to file certain customary motions with the Bankruptcy Court to ensure its reduced operations are able to continue, including paying employee wages and benefits, preserving certain customer programs, and compensating needed vendors on a go-forward basis”.
“We are proud of our achievements, and we have put thousands of Fisker Ocean SUVs in customers’ hands in both North America and Europe,” said a Fisker spokesperson.
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“But like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently. After evaluating all options for our business, we determined that proceeding with a sale of our assets under Chapter 11 is the most viable path forward for the company.”
On March 18, the EV startup reported having approximately 4,700 vehicles in inventory as demand didn’t meet the management expectations in 2023.
Henrik Fisker, co-founder and CEO of the struggling EV company, is set to speak at the Economic Times Auto Summit for the first time on Thursday, June 20. This keynote, titled “Engineering Sustainable Vehicles and Cleaner Mobility,” will mark the first public event where the chief executive talks since trouble escalated in the company.
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Further compounding Fisker’s financial challenges, an 8K form filed two weeks ago revealed that the company had defaulted on its senior secured note due in 2024.
The company announced last week that it is issuing two voluntary recalls affecting more than 11,000 vehicles in North America and Europe due to software-related issues.
The first one affects 11,201 vehicles across Europe, U.S. and Canada while the second one impacts 6,864 in the U.S. and 281 in Canada. The startup will send out an over-the-air update to version OS 2.1 to address both issues until the end of the month.
Fisker has recently sent an email to its employees offering the Fisker Ocean in its Extreme and Ultra variants at a special price of $20,000. The promotional email highlighted that some of the vehicles may be previously titled and mentioned additional fees associated with the purchase.
Written by Cláudio Afonso | LinkedIn | X
