Electric vehicle maker Fisker went public through a SPAC deal with Spartan Energy Acquisition Corporation. With its innovative products, the company could gain a significant foothold in the growing electric vehicle industry in the coming months. However, given the current global semiconductor chip shortage and FSR’s negative margins, is the stock worth owning right now?
This is not Stock Market advise, please check with a Qualified Professional before making any decisions.
Fisker Inc. an electric vehicle manufacturing company based in Manhattan Beach, California, went public through a reverse merger with Spartan Energy Acquisition Corporation, a private equity firm owned by Apollo Global Management. The stock, which began trading on October 30, 2020, rose nearly 13% on its first day of trading.
Concerns about the impact of a global semiconductor chip shortage on the electric vehicle industry could weigh on the stock in the near term. Additionally, this could be a risky bet given the stock’s overvalued valuation and the company’s poor financial health.
Here is what could influence the companies performance in the upcoming months:
A shortage of semiconductor chips needed to make everything from cars to laptops has been a problem for months. The chip shortage has become so severe that it will outlive the lockdowns and shutdowns that caused the shortage in the first place. Commerce Secretary Gina Raimondo has called on Congress to fully fund a plan to boost U.S. semiconductor production to address the global scarcity of critical components.
Electric car makers are scaling back operations as production costs soar due to rising semiconductor chip prices. As a result, revenue and earnings growth for many Electric Vehicle companies, including FSR, are expected to be subdued in the coming quarters.
FSR’s operating expenses soared to $109.56 million year over year in the third quarter ended September 30, 2021. Its operating loss was $109.57 million. The company reported a net loss of $109.84 million, compared with a loss of $0.37 per share in the same period. In addition, its net cash used in operating activities increased significantly to $103.45 million from the same period last year.
The companies trailing 12-month gross margin of 26.6% is 25.88% lower than the industry average of 35.8%. Furthermore, its ROA and ROC were negative 25.3% and 18.3%, respectively. Additionally, its trailing 12-month cash from operations was negative $190.44 million, compared to the industry average of $195.68 million. The companies weak financials and poor profitability pose significant threats to the stock’s future performance. Also, due to the current shortage of semiconductor chips and shrinking manufacturing, it could take several years for the company to generate a steady stream of revenue.
Fisker Inc. is an American electric vehicle manufacturer founded by Henrik Fisker and his wife Geeta. Fisker Inc. was founded in 2016 and is headquartered in Southern California from Fisker Automotive (founded by Henrik Fisker in 2007) that produced the Fisker Karma. Fisker Inc. is developing the Fisker Ocean, an all-electric Sports Utility Vehicle made from recycled and vegan materials with an estimated range of 300-350 miles.
The rebirth of Fisker (from Fisker Automotive) is largely based on claims for the development of new battery technology, such as a battery that can travel 500 miles on a 1-minute charge.
Fisker Automotive was founded in 2007 by Henrik Fisker and Bernhard Koehler.
Production was suspended in 2012 after its battery supplier A123 Systems. 2,000 vehicles were sold worldwide.
In 2014, the assets of Fisker Automotive were acquired by Wanxiang Group, and the name was changed to the new company Karma Automotive. Henrik Fisker retains the company trademark and the Fisker brand.
On October 3, 2016, Chairman and Chief Executive Officer Henrik Fisker announced the formation of Fisker Inc., an American automaker that designs and develops innovative electric vehicles with longer range, autonomous driving capabilities and advanced battery technology.
President and Chief Financial Officer with his co-founder wife, Geeta Gupta-Fisker. The company first stated in July 2016 that he was planning to design a fully connected electric vehicle with autonomous driving capabilities and aesthetics, and for the past two years he has been working on Designing “Electric Vehicles in Stealth Mode”
On October 31, 2016, Fisker Inc. released the design and specifications of its upcoming electric vehicle, the Fisker EMotion.
In November 2017, the company announced the development of Orbit, a fully automated, connected electric shuttle designed to serve smart cities, public airports and campuses. That month, Fisker Inc. announced that it had applied for a patent for the design of a flexible solid-state battery, which was expected to be mass-produced around 2020.
In September 2018, the company announced the development of a mass-market pure electric luxury SUV.
In April 2019, Don Jackson, a former head of manufacturing at Volkswagen and Toyota, announced that he would be joining the company as a senior advisor as the company ramped up production of electric SUVs.
In September 2019, Fisker Inc. announced a partnership with Game of Thrones actor Nikolaj Coster-Waldau, who will serve as Henrik Fisker’s partner and sustainability consultant to develop advanced, affordable electric vehicle models.
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