The New York Stock Exchange (NYSE) announced on Monday its decision to suspend trading of shares belonging to electric vehicle (EV) startup Fisker and is taking steps to remove the company from its stock exchange.
The exchange cited Fisker’s stock price, which has dropped to “abnormally low” levels, as the reason for its decision. This move follows a warning issued by the NYSE to Fisker a month ago when its stock price remained below $1 for 30 consecutive days, breaching the exchange’s listing rules.
Fisker has the option to contest the NYSE’s determination, but in a filing on Monday afternoon, the company indicated that it anticipates its stock to be shifted to an over-the-counter market like OTC Pink. Furthermore, Fisker disclosed that the delisting triggers repayment obligations on two loans, which it is currently unable to fulfill, potentially impacting its operations significantly.
The suspension marks a unstable day for Fisker, with its shares plummeting over 28% before trading was halted. Earlier, Fisker revealed the loss of a potential deal with a major automaker, rumoured to be Nissan, jeopardizing a recently announced attempt to secure emergency funding.
Fisker did not mention the reasons behind the termination of negotiations with the automaker, which was a crucial condition for a potential $150 million convertible note announced the previous week. The company stated its intention to request a waiver of this condition from the unnamed investor.
Fisker has been grappling with a series of challenges, including customer complaints, lawsuits, and federal investigations, for several months. The EV startup has faced difficulties in selling its Ocean SUV, falling short of internal sales targets. It transitioned from a direct sales model to dealership sales but encountered quality issues that it struggled to address.
In February, Fisker laid off 15% of its workforce (approximately 200 employees) and disclosed a cash reserve of $121 million last week. With production halted and a warning to investors about its financial viability, Fisker’s future hinges on securing fresh capital infusion.
The article has been updated to include information from Fisker’s SEC filing on Monday afternoon.
