Fisker has hired consultants

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Fisker has reportedly hired “restructuring advisers to assist with a possible bankruptcy filing,” according to the Wall Street Journal.
Fisker has been going through a rough time lately, with its stock possibly being delisted due to low share prices.
It also indicated in its recent quarterly report that there is “substantial doubt” that it can continue operating, and that it was seeking outside investment.
This despite a 300% jump in deliveries in Q4, quite an accomplishment from one quarter to the next.
And not long after Fisker’s quarterly report, there was news that they might have found that outside investment in the form of “advanced” discussions with Nissan, who reportedly seek a partnership on electric trucks.
Fisker did unveil a future pickup truck, called “Alaska,” last year, and that truck does happen to look a lot like a Nissan Frontier.
Fisker also recently announced two other future vehicle designs, the compact Pear and the Ronin sportscar.
Fisker has claimed that it does make money on the sale of its Ocean SUV (see our review of it here), due partly to its method of contract manufacturing though Magna Steyr.
While this means lower margins since some margin goes to the manufacturer, this also helps to keep initial costs down as Fisker does not need to invest in billion-dollar factories like Rivian or Tesla are doing.
However, there are still significant costs associated with running the company, and with the direct-sales model, which has proven difficult for Fisker to scale.
To the point that Fisker recently announced a retreat from the model and said the company would take on dealer partners to help sell its inventory of cars – which it estimated to be worth about $530 million as of March 1.
But today Fisker received another blow, in the form of a report in Wall Street Journal claiming that the company has hired financial adviser FTI Consulting to help with a possible bankruptcy filing.
As a result of the report, Fisker (FSR) shares are currently down 45% in after-hours trading.
Electrek’s TakeWSJ sourced “people familiar with the matter,” and while the outlet generally has good business reporting, one should also consider its history of spreading climate disinformation.
It is, after all, owned by a climate denier, Rupert Murdoch, who does interfere with his media outlets to push an anti-environment agenda.
For example, in the same article, WSJ falsely claims that EV demand is “sputtering,” despite that EV sales continue to climb.
Regardless of this particular inaccuracy, there are still factual troubles with Fisker, so it is believable enough that the company would seek consulting, especially after the recent quarterly report that warned this might be possible.
To our understanding, this does not mean that Fisker is necessarily going to file bankruptcy, but rather seeking analysis as to whether it would be the most beneficial path forward.
We’ll have to stay tuned and find out which path the company decides to take.

The Wall Street Journal claims that Fisker has engaged “restructuring advisers to assist with a possible bankruptcy filing.”.

Due to low share prices, Fisker may have to delist its stock, which has been going through a difficult period lately. It has expressed “substantial doubt” about its ability to continue operating, and it is actively seeking outside investment, according to its most recent quarterly report. This is significant given that deliveries increased by 300 percent in Q4—a remarkable achievement from one quarter to the next.

Shortly after Fisker released its quarterly report, there was a rumor that they may have discovered outside funding in the shape of “advanced” talks with Nissan, who is purportedly looking to collaborate on electric trucks. In the previous year, Fisker did reveal the “Alaska,” a pickup truck of the future that happens to resemble a Nissan Frontier extremely closely.

The tiny Pear and the Ronin sportscar are two more upcoming car concepts that Fisker recently revealed.

Fisker has asserted that it does profit from the sale of its Ocean SUV (read our review of it here), in part because it uses Magna Steyr for contract manufacturing. Fisker does not need to invest in billion-dollar factories like Rivian or Tesla do, which helps to keep initial costs down even though this results in lower margins because part of the margin goes to the manufacturer.

Fisker has found it challenging to scale the direct-sales model, and there are still substantial operating expenses related to the business. It got to the point where Fisker, which estimated the value of its car inventory as of March 1 at roughly $530 million, recently announced a departure from the model and stated the company would work with dealer partners to help sell the cars.

However, Fisker suffered a further setback today when the Wall Street Journal revealed that the company had enlisted the services of financial advisor FTI Consulting to assist with a potential bankruptcy filing. In after-hours trading, Fisker (FSR) shares are currently down 45% due to the report.

The View from Electrek.

Although WSJ typically produces excellent business reporting, its history of disseminating false information about climate change should also be taken into account. The outlet cited “people familiar with the matter.”. Ultimately, Rupert Murdoch, a climate denier, owns it and uses his media outlets to further his anti-environment agenda. The Wall Street Journal, for instance, falsely asserts in the same piece that EV sales are rising even though EV demand is “sputtering.”.

It is plausible that the company would seek consulting despite this specific inaccuracy because Fisker still has factual issues; this is especially true in light of the recent quarterly report that raised concerns about the possibility of such issues. According to what we understand, Fisker is looking to analyze whether filing for bankruptcy would be the best course of action rather than necessarily filing. Keeping an eye on the company’s decision will be necessary.

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