EV maker Fisker might be filing for bankruptcy soon

A report in the Wall Street Journal suggests the end may be near

By Melvin Backman2 min readUpdated March 13, 2024

It’s true that fewer and fewer people seem to want an electric vehicle these days. And that has had tough financial ramifications for EV manufacturers. Ford $F is cutting production of its F-150 Lightning electric truck. Rivian $RIVN is doing layoffs. One analyst thinks that Tesla $TSLA might lose money this year amid a deceleration in demand. People don’t even want to rent EVs like they used to, and the likes of Hertz are pruning their fleets. And now Fisker, already in dire straits, might become one of the first big casualties of the slowdown.

The Wall Street Journal is reporting that the company is hiring advisers in preparation of a possible bankruptcy. The company had already been warning its investors that it might not have enough cash to make it through the end of the year as it deals with customer complaints and shareholder lawsuits about the quality of its vehicles and its financial reporting, respectively. Fisker declined to comment on the WSJ story to Quartz.

Bonds away

One window into how dire things have become is in the market for its debt. In its latest quarterly earnings numbers — preliminary, because the company has already said that a fuller picture of its financials will be delayed because it “has experienced a change in key accounting personnel” — the company reported that it has $1.3 billion in publicly traded notes outstanding. A big chunk of those notes are due to be paid back in 2026. And that debt is trading at about 5 cents on the dollar.

Fisker has told investors that it’s in negotiations with a “major” automaker who would invest in the company and keep it going. It’s said the same thing about a big, unnamed creditor. But Wall Street doesn’t seem to think that help is on the way — its stock plummeted 44% in after-hours trading after Wednesday’s WSJ report.

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