NYSE Suspends Trading of Fisker Stock
The New York Stock Exchange (NYSE) announced on Monday that it would immediately suspend trading of shares of electric vehicle (EV) startup Fisker and move to delist the company from its stock exchange.
The decision to suspend trading and delist Fisker came after the NYSE deemed that the company’s stock was “no longer suitable for listing” due to “abnormally low” price levels. This move followed a warning issued by the NYSE to Fisker last month, indicating that its stock price had remained below $1 for 30 consecutive days, putting it out of compliance with the exchange’s rules.
Fisker has the option to review the NYSE’s determination, but it stated in a filing on Monday that it anticipates its stock will be moved to an over-the-counter market such as OTC Pink. Additionally, the delisting triggered repayment clauses in two outstanding loans for Fisker, which the company currently cannot afford, potentially having a “material adverse effect” on its business.
The suspension of trading marked a turbulent day for Fisker, with its shares plummeting over 28% before trading was halted. Earlier in the day, Fisker disclosed the loss of a potential deal with a major automaker, reportedly Nissan, which jeopardized a recently announced attempt to secure emergency funding.
The termination of negotiations with the automaker was a critical condition for closing a potential $150 million convertible note announced the previous week. Fisker indicated that it would seek to have the unnamed investor waive this closing condition.
Fisker has been facing a series of challenges, including customer complaints, lawsuits, and federal investigations, for several months. The company has struggled to meet sales targets for its Ocean SUV, pivoting from a direct sales model to dealership sales. Quality issues have also plagued Fisker, with internal documents suggesting difficulties in resolving them.
In February, Fisker announced layoffs affecting 15% of its workforce (around 200 employees) and reported having only $121 million in cash reserves last week. With production halted, the company warned investors that it would not survive a year without a fresh injection of capital.
