Shares of young electric vehicle (EV) manufacturer Fisker (FSRN -12.70%) surged Thursday morning, rising as much as 10.6% within minutes of the market's opening before giving up some of those gains -- shares were trading around 6% higher as of noon ET.
The EV stock has been in the headlines for all the wrong reasons lately, including production outlook cuts, delayed earnings release, and management changes, among other things. The stock, unsurprisingly, crashed in recent weeks, compelling CEO Henrik Fisker to address the fall through a statement released on Wednesday after the markets closed.
Fisker's CEO believes the stock's fall is unjustified
Henrik Fisker believes the "negative reports about the company have been overblown." Elaborating on why he thinks so, he highlighted how the company has achieved many "firsts" in the industry, including delivering a sustainable EV in the "longest range" in its category and launching EVs in 11 countries.
Henrik Fisker foresees compelling long-term opportunities for the company and believes its current share price neither reflects the company's achievements so far nor its opportunities. He also reminded investors that he is a significant shareholder in the company as well.
What does that mean? When founders have their skin in the game, they often try to create value and make the company a success.
Is Fisker stock a buy now?
As much as its CEO tries to convince investors otherwise, there's no denying that Fisker is facing several challenges. It delivered fewer than 1,100 Ocean vehicles in its third quarter against production of a little more than 4,700 units because of logistics constraints. Fisker's net revenue of $71.8 million fell short of analysts' estimates, and it reported a negative gross margin of 17%.
Worse yet, the company slashed its full-year production guidance to only 13,000 to 17,000 units from 20,000 to 23,000 units. In November though, Fisker did the unthinkable again by cutting its production outlook further to only around 10,000 units as it prioritized liquidity. Put another way, Fisker requires cash for working capital needs and is therefore scaling back production. That's a pretty dire situation to be in for any company.
Fisker expects to provide more business updates later this month, and it'll be worth the wait to see what the company has to say. Until then, I'd be cautious about investing in the EV stock until I see firm signs of a turnaround.
