Fisker (FSRN -12.70%) dropped to as low as $1.10 per share today. That's an all-time low mark for the stock of the electric vehicle (EV) start-up. The move lower is occurring despite the major U.S. stock indexes all moving higher today.
As of 3:10 p.m. ET, Fisker stock was still at that low mark, down by 8.3%. While no major news came from the company, a Securities and Exchange Commission (SEC) filing may be the culprit.
Warning investors about changes
Fisker has released several items of news to start 2024. They included the hiring of a new chief accounting officer after two previous changes to that position since October.
In the same SEC report, filed today, where it provided more details behind that hiring, the company also noted previously announced changes to its distribution model. But that portion also included some warnings and potential headwinds that weren't included in the Jan. 4 press release.
Transition may cost some sales
While the transition from a direct-to-consumer sales model to one more like the dealership strategy used by legacy automakers might solve one problem, it could also cause another. According to Fisker there are more unknowns that at this point could make it difficult to evaluate its "business, operating results and future prospects."
But it could also cost the company crucial sales. The entire reason for the change was to overcome difficulty in attracting customers and getting vehicles to them. Fisker noted that there may be consumers who already made a deposit through the direct sales model who may decide not to move forward with the purchase using a dealership.
It also noted licensing and permits may still need to be obtained to use a dealer model. Fisker stated, "Compliance with and changes to state dealer franchise laws could adversely affect our ability to successfully move to a dealership sales model."
The notice of a potentially "material adverse effect" on a business isn't unusual in some SEC filings. But these may be specific issues that investors hadn't thought through when Fisker announced these plans last week. And it comes at a critical time when the company needs to see higher sales volume sooner rather than later. That helps explain why the stock hit an all-time low today.
