Fisker Inc.’s cash balance is less accessible than the electric-vehicle startup has led investors to believe, short seller Fuzzy Panda Research wrote in a new report.
(Bloomberg) — Fisker Inc.’s cash balance is less accessible than the electric-vehicle startup has led investors to believe, short seller Fuzzy Panda Research wrote in a new report.
The vast majority of the $825 million in cash that Fisker reported at the end of the third quarter is tied up in undisclosed bank guarantees to protect Magna Steyr, the contractor who is actually building the vehicles, Fuzzy Panda said, citing unidentified former employees from both companies. The short seller estimated that at least $790 million is pledged to ensure Magna Steyr is paid for tooling, manufacturing costs and margins.
A spokesperson for Los Angeles-based Fisker told Bloomberg News that the company believes there are “numerous false allegations in the report” and that the automaker will provide a “detailed statement later today addressing each of them.” Founder and CEO Henrik Fisker called the claims “largely misleading” in an email to staff, a copy of which was viewed by Bloomberg News, and told employees not to engage with social media posts about the matter.
“We are actively addressing the report at top levels of corporate and legal leadership,” he wrote.
A spokesperson for Magna International Inc., the parent of Magna Steyr, declined to comment.
The claim is part of a longer report published Thursday morning about Fisker, making the startup the latest target of short sellers who say young EV makers have overpromised on their way to becoming public companies. Fisker completed a reverse merger in 2020, and just last month Magna began making the first few electric SUVs for the startup.
Shares Down
The company’s shares fell 4.7% at 12:36 p.m. in New York after earlier declining as much as 10%. Fisker had fallen about 51% this year through Wednesday, giving it a market valuation of about $2.41 billion.
Fuzzy Panda has previously published reports about Electric Last Mile Solutions Inc., which filed for bankruptcy in June, and Workhorse Group Inc., which has struggled since losing its bid in February 2021 to make electric trucks for the US Postal Service.
Fuzzy Panda said it is short Fisker shares. In such transactions, investors borrow stock from shareholders and sell it, hoping to profit by repurchasing the securities later at a lower price and returning them to the holder.
In total, about 52.3 million shares of Fisker have been sold short, for a short-interest ratio of 9.7%, according to data compiled by Bloomberg.
(Updates with response details from internal email)
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