In a startling turn of events, electric vehicle startup Fisker is grappling with a significant decline in premarket trading following a disappointing earnings report and unsettling revelations in a regulatory filing that has cast doubt on the accuracy of the company’s prior financial statements.
As the market opened on Tuesday, Fisker’s shares plummeted by more than 17% from their previous closing value of $4.11 per share. The electric vehicle company had released its third-quarter results on Monday, and they failed to meet the expectations of Wall Street. With revenue standing at $71.8 million and a net loss of $91 million (or 27 cents per share), Fisker’s financial performance fell short of what investors had anticipated.
However, the downward spiral did not end there. In a regulatory filing issued after the earnings report, Fisker disclosed that, in the wake of the sudden departure of its chief accounting officer in October, the company had identified “material weaknesses” in its internal control over financial reporting. This revelation led to a delay in filing its quarterly 10-Q report, originally scheduled for release before the U.S. markets opened on Nov. 8.
The departure of the chief accounting officer on October 27 and the subsequent appointment of a new officer on November 6 were cited as reasons for the unexpected delay in the financial statements. The company’s Chief Financial Officer, Geeta Gupta-Fisker, acknowledged during Monday’s earnings call that the third quarter had been “highly complex” due to the global expansion of the company.
Fisker has yet to provide a detailed explanation for the sudden departure of its former chief accounting officer or the reasons behind the delayed earnings report. The latest regulatory filing, however, raises the specter of potential restatements of Fisker’s previous financial reports, a move that could have significant implications for the company and its investors.
The “material weaknesses” in internal controls will be expounded upon in the upcoming 10-Q report, according to Fisker. Gupta-Fisker assured investors that the company is actively recruiting additional financial experts to address the challenges it is currently facing. However, no specific timeline was provided for when investors can expect the filing of the 10-Q report.
As Fisker navigates these turbulent waters, investors are left waiting for more clarity on the company’s financial situation and its plans to rectify the identified weaknesses in its internal controls. The future trajectory of Fisker’s shares remains uncertain, and the electric vehicle startup is now under increased scrutiny from both Wall Street and its investor base.
(Source: John Rosevear | CNBC | Al Root | Barron’s)
