By The stock of electric-vehicle start-up Fisker (FSR) has experienced significant volatility following accounting control issues that resulted in unexpected management turnover.
Stock Performance
Shares of Fisker were down approximately 12% and priced below $2 per share during midday trading on Monday. Meanwhile, the S&P 500 displayed a flat performance, and the Nasdaq Composite experienced a modest increase of 0.3%.
This recent dip in Fisker stock leaves its value hovering around the same level it was before the company filed its overdue quarterly report with the Securities and Exchange Commission.
Accounting Problems and Management Changes
Fisker encountered accounting problems, leading to the departure of two chief accounting officers in recent weeks. Consequently, the company postponed reporting its third-quarter results and announced the exit of chief accounting officer John Finnucan on November 8th. Finnucan was succeeded by Florus Beuting.
Resilience in Stock Performance
Despite these internal challenges, Fisker’s filing of the 10-Q did not significantly impact the company’s financial figures. This outcome seems to have reassured investors, as the stock experienced a marginal increase from approximately $2 to $2.23 over the course of two trading days.
Fisker remains a stock worth monitoring closely as the company endeavors to address its accounting control issues and stabilize its management team.
Troubles with Accounting: Fisker’s Financial Setback
The recent earnings report and subsequent 10-Q filing by Fisker have revealed some concerning discrepancies. Surprisingly, the operating loss reported in the Nov. 13 earnings report amounted to approximately $100 million. However, in the 10-Q filed on Nov. 22, the loss grew slightly to around $104 million.
Moreover, certain numbers were also reclassified. Initially, the gross loss reported on Nov. 13 stood at about $12 million. In the 10-Q, this figure surged to about $33 million. Notably, various selling, general, and administrative expenses were shifted into the company’s cost of goods sold category.
These changes shed light on some of the accounting issues plaguing the company, leading to a significant impact on investors’ sentiment. Prior to the announcement of the earnings-report delay, Fisker stock was trading at approximately $4.37 per share. However, in recent days, the shares have plummeted by more than 50%.
As of midday trading on Monday, Fisker’s shares have experienced a staggering 74% decline over the past year. Consequently, the company’s market capitalization now stands below $1 billion.
With the current state of affairs, there are not many U.S. EV start-ups left with a market capitalization exceeding $1 billion. Market leaders in this sector include Lucid Group (LCID) and Rivian Automotive (RIVN), boasting market capitalizations of roughly $10 billion and $16 billion, respectively.
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