While the S&P 500 seems poised to lock in a gain for the week, shares of electric vehicle (EV) upstart Fisker (FSRN -12.70%) are driving in the other direction.
Investors are choosing to unplug Fisker stock from their portfolios for two reasons. First, investors are losing confidence in the company after it reported that it has received a noncompliance letter from the New York Stock Exchange (NYSE). Also, the company is now under investigation regarding a vehicle safety concern.
As of 12:40 p.m. ET on Thursday, shares of Fisker have plunged 26% since the market's close last week, according to data provided by S&P Global Market Intelligence.
There's a lot powering the bears' pessimism
Due to Fisker stock averaging a closing price lower than $1.00 for 30 consecutive days, the NYSE issued the company a noncompliance letter on Feb. 15. Fisker will not be immediately delisted from the NYSE as a result of the noncompliance. Instead, it can regain compliance within the next six months if its stock closes on the last day of a calendar month with a share price of at least $1.00, as well as an average closing share price of at least $1.00 over the previous 30-trading day period of said month.
The second sore spot for investors is news that the National Highway Traffic Safety Administration (NHTSA) has opened a safety investigation relating to alleged unintended movements of Fisker Oceans. The NHTSA states that complaints "allege the inability to shift into park and/or the vehicle not shifting into the intended gear."
Watch this one from the side of the road for now
The delisting notice and safety investigation are valid concerns, but the thing EV investors should be more acutely focused on is what the company reveals in its fourth-quarter 2023 financial results report, scheduled for next Thursday. It will be important to see how the company's new sales strategy is progressing, as well as management's insight into the company's future.
