What happened
Ever-volatile specialty electric-vehicle (EV) stock Faraday Future Intelligent Electric (FFIE -4.08%) had yet another dramatic session on the stock exchange Thursday. The luxury EV maker's shares blasted skyward by almost 26%, following shareholder ratification of several measures that will help the company stay on the stock exchange and solicit funding.
So what
Two days after finally rolling out, to great fanfare, its first FF 91 2.0 Futurist Alliance model, Faraday held a special meeting of shareholders to vote on several matters.
The first was its proposal to enact a reverse share split, a move that will allow its stock to continue being listed on the Nasdaq. That, thankfully for investors, passed by an overwhelming majority.
The ratio at which the high-end EV company will reverse-split its common shares is yet to be determined; it could be anywhere from 1-for-2 to 1-for-90. This is ultimately to be decided by the board of directors.
Perhaps more importantly, the company's shareholders green-lighted a potential stock issue. Back in May, Faraday filed the paperwork to float up to 115,504,901 shares of common stock. Any flotation, of course, will be affected by the reverse-split ratio decided by the board.
Now what
Faraday, which has posted losses that have been quite heavy at times, is certainly not out of the woods yet. While it did hit an important milestone with the delivery of that first car, it now has to prove to investors, potential customers, and partners (not to mention the Nasdaq) that it can be a viable business. That won't be easy given that it operates in a niche market, and one that requires significant amounts of capital.
