What happened
Start-up EV maker Faraday Future Intelligent Electric (FFIE 5.84%) hasn't sold a vehicle yet, but the stock has still captured the attention of some investors. That's driven explosive volatility, including a spike in the stock of as much as 34.1% today. As of 2:56 p.m. ET, Faraday Future shares still traded up 22.2%.
NASDAQ: FFIE
Key Data Points
So what
Today's jump doesn't much help investors who have owned the stock for the last month, however. Shares are down about 60% in that time, even with today's bounce. And today's jump doesn't necessarily bode well for the future of the stock or the company, either. There was no news released today related to the business, and the company still has a real potential to go bankrupt. The only signal as to what's driving the stock today is the fact that shares are trading hands at quadruple the normal volume. That indicates retail traders are behind today's pop.
Image source: Faraday Future Intelligent Electric.
Now what
Faraday recorded an operating loss of about $137 million during the quarterly period ended June 30, 2022 and subsequently told investors it held just $48.7 million in cash and restricted cash as of Aug. 26, 2022. That led the company to admit that without additional funding, it may not be able to continue operations. If it is able to continue toward producing its high-performance electric FF 91 crossover utility vehicle, it could still alter the timing and volume of production depending on any details of injections of capital.
Today's spike in volume and price indicates there are traders trying to make bets on the stock. True investors should ignore that noise and move on unless or until Faraday's business obtains enough money to move its business forward.
