Shares of Faraday Future (NASDAQ:FFIE) stock are in the spotlight after the struggling EV company hosted Master Investment Group (MIG) CEO Sheikh Abdullah Al Qassimi at its headquarters in Los Angeles for a strategic meeting. MIG operates as an investment firm in the United Arab Emirates (UAE).
Faraday Fuure founder YT Jia, CEO Matthias Aydt and other Faraday team members attended the meeting. Afterwards, the company described the meeting as a “pivotal moment.”
“It was a pleasure to engage in a strategic meeting with such a esteemed leader in the industry,” said Al Qassimi on LinkedIn. “A new chapter to be started!”
Neither party revealed specific details about the meeting. However, they did hint at a potential investment in their respective statements.
FFIE Stock: Faraday Future Holds Meeting with Master Investment Group
Additionally, Faraday Future previously stated that it was in the process of seeking strategic financing in the Middle East. However, a lack of available authorized shares presented a roadblock toward this effort.
To fix this, the company has proposed increasing its authorized common stock by a staggering 800%, or from 463.31 million shares to 4.16 billion shares. It also wants to increase authorized preferred stock from 473.31 million shares to 4.17 billion shares, or an increase of 783%.
Both of these measures are included in one proposal and will be voted on at Faraday’s upcoming annual meeting of stockholders. The meeting has been scheduled for sometime next month, although a definitive date hasn’t been provided yet.
If the measure is approved, shareholders will likely experience significant dilution, as their ownership percentage of FFIE stock will fall if shares outstanding increases. At the same time, the company is desperately in need of capital in order to continue its operations.
In 2023, Faraday Future generated just $800,000 of revenue while its cost of goods sold was $43 million. It used $278 million of cash for operating activities while its cash balance as of Dec. 31 was just $2 million when excluding restricted cash of $2 million. In its 2023 Form 10-Q, the company also raised substantial doubt about its ability to continue as a going concern for the next 12 months.
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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.
