Fisker (FSRN -12.70%) shares have had a turbulent week. It's ending the week on a high note, though. After popping as much as 10.4% Friday morning, shares of the electric vehicle (EV) maker are holding on to a 4.5% gain as of 12:20 p.m. ET.
Yet, the stock is still down more than 20% over just the past five trading days. Investors began to worry after the company delayed the release of its third-quarter report due to the timing of the replacement for its recently departed chief accounting officer. That led the EV start-up to warn that it would be unable to file its official comprehensive quarterly statement along with its press release. But the company finally filed that official 10-Q report prior to the market's Thanksgiving holiday.
Addressing finance and accounting concerns
The company announced several changes to its financial department as it said its increasing sales volumes led to the need to scale up its reporting systems to keep pace. It also caused the company to share that it found "material weaknesses in internal [financial] controls." Now, the market knows the details behind that warning.
Fisker said it found it had initially recorded about $20 million of third-quarter expenses as selling, general, and administrative on its income statement, but those costs were really related to services related to production. So, they are now considered a cost of revenue instead. There was also a small adjustment related to inventory adjustments.
Not out of the woods
Investors breathed a sigh of relief today after learning that the details behind those prior warnings weren't something more concerning. And Fisker seems to have beefed up its financial and accounting departments now.
But the fact remains that it only delivered about 1,100 EVs in the third quarter. It has since said it significantly ramped up its pace of deliveries with a change in its distribution strategy. That has led to a record day of vehicle deliveries and a rate it expects to sustain. Some investors are buying into that positive news today. But the company still has far to go to ensure its business will survive and thrive.
