Fisker (OTCMKTS:FSRN) stock is down more than 15% today after the struggling electric vehicle (EV) company revealed discounts of up to 39% on its Ocean models. The company began trading on the over-the-counter (OTC) market yesterday after being delisted from the New York Stock Exchange due to a low stock price.
Now, the Fisker Ocean in the Sport trim will start at $24,999, signaling a 36% discount from its prior price of $38,999. The Ultra trim was also discounted by 34% to $34,999, while the Extreme trim got a 39% price cut to $37,499.
During 2023, Fisker produced a total of 10,193 Oceans. However, only 4,929 — or less than half of its yearly production — were delivered to customers. These metrics improved during the fourth quarter, as Fisker produced 4,789 Oceans and delivered 3,818 of them. As of March 15, the company had produced 1,000 Oceans and delivered 1,300 of them, bringing its inventory to about 4,700 vehicles. These vehicles are worth over $200 million according to internal estimates.
FSRN Stock: Fisker Cuts Ocean Prices by 34%-Plus
The extreme price cuts reflect the uncertain situation that Fisker is in right now. Inventory has been a huge problem for the unprofitable company, which is why Fisker is trying to get these vehicles out of the door as soon as possible. On March 18, the company announced that it would pause production for the next six weeks.
Fisker badly needs capital. As a result of the delisting, Fisker must offer to repurchase its 2026 unsecured 2.50% convertible notes. The delisting also triggered an event of default for its 2025 senior secured convertible notes, requiring the company to immediately pay these noteholders in full. The problem is that Fisker doesn’t have enough cash to do so.
“Moreover, we may not be able to satisfy our debt service obligations and could need to seek protection under applicable bankruptcy laws,” warned the company.
Fisker announced a $150 million financing commitment earlier this month. Unfortunately, the company’s discussion termination with a large automaker resulted in a closing condition of the commitment not being able to be satisfied. Fisker will try to waive the closing condition or adjust the terms of the commitment. No further updates have been provided.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
