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

Fisker has reportedly hired “restructuring advisers to assist with a possible bankruptcy filing,” according to the Wall Street Journal on Wednesday.

Update: Fisker responded with a statement, included below.

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.

Update: Fisker released a statement in response, after market close on Thursday:

“As a matter of company policy, Fisker does not comment on market rumors and speculation. However, Fisker often works with outside advisors to help manage its business and assist in developing and executing strategies. Fisker is focused on raising additional capital and engaging in a strategic partnership with a large automaker. The company is also continuing to pursue its shift to a Dealer Partnership model in both North America and Europe. The leadership team is laser-focused on these efforts.”

As a result, FSR stock, which closed down 52% on Thursday, then went up 42% in after-hours trading, recovering to 22 cents per share in after hours trading Thursday, after closing yesterday at 33 cents per share. The reason for this recovery seems to be Fisker’s mention of it seeking a “strategic partnership with a large automaker,” which had previously been reported as mentioned in the article above.

Electrek’s Take

WSJ 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.