Although struggling against severe financial challenges, Faraday Future (NASDAQ:FFIE) saw its shares jump 12% earlier on Friday. Upper management discussed strategic initiatives for the enterprise in a YouTube video. Still, FFIE stock appears to be a market gamble appropriate only for dedicated speculators.
Faraday Future CEO YT Jia announced on the popular video-sharing platform that the company restarted deliveries of its electric vehicles (EVs). Notably, Jia disclosed the first delivery of an FF 91 — a four-door crossover/SUV that features ample cargo space, high ground clearance and supercar performance — to a retail investor.
Further, the head executive remarked that the resumption of deliveries may represent a “turning point” for the EV maker. Per Benzinga, the “video laid out three goals for the company including securing strategic investment, increasing production capacity and implementing its U.S.-China Bridge strategy for the auto industry.”
This disclosure, combined with the meme trading fervor that was reignited thanks to Keith Gill (aka Roaring Kitty), helped catapult FFIE stock. However, questions persist about the viability of this movement.
FFIE Stock Faces Stormy Clouds Despite Some Signs of Optimism
It wouldn’t be fair to entirely dismiss FFIE stock as a guaranteed money pit. Notably, InvestorPlace’s Louis Navellier rated Faraday Future a “B” in his Portfolio Grader. Despite being a long shot, Navellier writes, “…a relief rally may be possible. As we have pointed out in prior coverage of Faraday, the company has been placing greater focus on the Middle Eastern EV market.”
Yes, FFIE stock has been incredibly choppy. However, in the trailing month, shares have gained 1,429% in equity value. That has to be respected. On the other hand, in the past six months, the company lost 19%. And the big whammy, of course, is that in the past one-year period, FFIE is down over 99%.
Earlier, much of the upside narrative centered on the short-squeeze potential of FFIE stock. According to Fintel, on May 30 of this year, Faraday’s short interest as a percentage of float stood at 31.5%. Typically, short interest above 20% is considered extremely high.
However, on May 31, Fintel updated its data to reflect that short interest dropped to 2.75%. That has always been the risk since, even during the heightened short interest days, the short interest ratio — or the time required to cover all short positions based on average trading volume — had been exceptionally small.
Without the short-squeeze catalyst, Faraday must depend on the aforementioned strategic initiatives. That may be too rich for most investors to handle.
On the date of publication, Josh Enomoto did not have (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.
