Fisker has reportedly hired bankruptcy advisors [Updated, Fisker responds]

Fisker has reportedly hired “restructuring advisors to assist with the potential bankruptcy filing,” the Wall Street Journal reported on Wednesday.

to update: Fisker responded with a statement included below.

Fisker has had a tough time recently, with its stock likely being delisted due to falling stock prices. It also indicated in its latest quarterly report that there is “major doubt” about its ability to continue operating, and that it is seeking external investments. This is despite a 300% jump in deliveries in the fourth quarter, a significant achievement from one quarter to the next.

Shortly after Fisker's quarterly report came out, there was news that they may have found outside investment in the form of “advanced” discussions with Nissan, which is said to be seeking an electric truck partnership. Fisker unveiled a futuristic pickup truck called the Alaska last year, and that truck looks a lot like the Nissan Frontier.

Fisker also recently announced two other future vehicle designs, the Pear compact car and the Ronin sports car.

Fisker has claimed to make money selling its Ocean SUV (see our review here), partly due to its approach to contract manufacturing through Magna Steyr. While this means lower margins since some of the margins go to the manufacturer, this also helps keep upfront costs low as Fisker doesn't need to invest in billion-dollar factories like Rivian or Tesla.

However, there are still significant costs associated with running the company, and the direct selling model, which has proven difficult for Fisker to expand. So much so that Fisker recently announced it was backing away from that model and said the company would use dealer partners to help sell its car inventory — which was valued at about $530 million as of March 1.

But today Fisker received another blow, in the form of a report in the Wall Street Journal claiming that the company has hired financial consultant FTI Consulting to assist with its potential bankruptcy filing. As a result of the report, Fisker (FSR) shares are currently down 45% in after-hours trading.

to update: Fisker issued a statement in response, after the market closed on Thursday:

“With regard to corporate policy, Fisker does not comment on market rumors and speculation. However, Fisker often works with outside consultants to help manage its business and assist in developing and implementing strategies. Fisker is focused on raising additional capital and entering into a strategic partnership with a large automaker. The company also continues to pursue its transition to a dealer partnership model in both North America and Europe, and the leadership team is focused intensely on these efforts.

As a result, FSR stock, which closed down 52% on Thursday, is gone higher 42% in after-hours trading, recovering to 22 cents a share in after-hours trading Thursday, after closing yesterday at 33 cents a share. The reason for this rebound appears to be Fisker's indication that it is seeking a “strategic partnership with a major automaker,” which was previously reported as mentioned in the article above.

Take Electric

The Wall Street Journal turned to “people familiar with the matter,” and although the outlet generally provides good business reporting, one should also take into account that date to Spreading climate disinformation. It is ultimately owned by A Climate denierRupert Murdoch, who He interferes in his own media to pay Anti-environmental agenda. For example, in the same article, the Wall Street Journal falsely claims that demand for electric vehicles is “stumbling,” even though electric vehicle sales continue to rise.

Aside from this specific inaccuracy, there are still real-world issues with Fisker, so it's reasonable for the company to seek consulting, especially after the recent quarterly report warned of the possibility. From our understanding, this does not mean that Fisker is necessarily Going to file bankruptcy, but rather seeking an analysis on whether this is the most beneficial path forward. We will have to stay informed and see what path the company decides to take.