The giant screech you heard Wednesday afternoon in the vicinity of the New York Stock Exchange was investors slamming the brakes on Fisker (FSR +0.00%) stock. Many eagerly traded out of the stock, which was down by low double-digit percentages in the morning before it recovered slightly to end the day 9% lower.
The immediate catalyst was a deep price target cut by an analyst, but as usual in such cases there were other factors behind the slide. With Wednesday's decline, Fisker has crashed below the $1 per-share barrier, the lowest level in its history. Perhaps this makes it a bargain for investors willing to accept a fairly high level of risk.
Troubles compounded
Fisker is hardly the electric vehicle (EV) pace-setter of the moment. Compounding its numerous struggles to produce and sell the Ocean SUV -- so far its only commercialized model -- on Tuesday the National Highway Traffic Safety Administration (NHTSA) announced that it has launched an investigation of the Ocean's braking system.
That's another headache the company just doesn't need. It has labored mightily to both produce and sell the Ocean. All told, 10,142 of the vehicles were assembled in 2023, however management confidently guided for at least 32,000 as recently as May of that year.
Deliveries have also been painfully slow at times, leading to growing customer discontent. In Fisker's conference call discussing its most recent set of quarterly results, CEO and company namesake Henrik Fisker succinctly admitted this problem, adding that numerous would-be Ocean owners were "getting really annoyed."
OTC: FSR
Key Data Points
Fisker's stock price is tempting, but...
Making and selling automobiles is never a cheap or easy endeavor. It's not hard to fall well behind in this industry, and that very much seems to be what's happening with Fisker now. While a tiny stock price might be tempting for bottom feeders, to me this company is looking too troubled for even a throwaway bet. It feels best to avoid Fisker stock for now.
