Fisker tumbles on warning; ‘hard to make’ investment case at this stage, analyst says

Fisker (FSR) unloaded a cache of bad news during its Q4 earnings report yesterday, shaking investors and Wall Street analysts.

Fisker reported that given its financial condition, evolving dealership sales approach, and challenging EV market, it has “substantial doubt about its ability to continue as a going concern” when the company files its official financial statements for 2023. Fisker also said it would reduce its headcount by 15%.

Fisker said it had $396 million in cash at the end of Q4, though $70 million of that is restricted. Fisker said it is in talks with a current noteholder about making an additional investment in the company and that it’s negotiating with “a large automaker for a potential transaction which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.”

While talks of a cash infusion and strategic partnership with an established automaker are welcome news, it wasn’t enough to end doubts of Fisker’s precarious condition. Shares of the EV maker tumbled over 40% in early trade, with shares now stuck below $1 since early January.

Citi analyst Itay Michaeli generally feels Fisker’s lone product, the Ocean EV, holds promise and isn’t surprised that a large automaker is interested in investing in Fisker, but this isn’t enough for him to keep the faith in Fisker.

“Securing such an agreement would likely serve as a major positive for Fisker, but it’s hard to underpin an investment thesis entirely on this, and we would’ve liked to have seen more progress on this front by now,” Michaeli wrote in a note to investors. Michaeli…