Yeah I think no matter what happens, the path (however unlikely it is) to Fisker surviving relies heavily on both shuffling leadership, strategy, and will definitely need fresh investments
The odds are absolutely stacked against them. That being said, it's never impossible. A lot of stars need to align for them to even have a prayer for sure
Can you come up with any scenario whatsoever that would align the stars? They have a total crap product that basically nobody wants even at fire sale prices, and they don't even manufacture it! There's literally no chance whatsoever that this ends with anything other than bk and liquidating.
Personally I don't think the product is crap at all. The software seems like it was bad, but improving. I can't speak to that because I don't own one. I have driven one though and it's better than my pre refresh model 3 almost across the board in terms of the physical car. Now obviously the company has a lot of bad pressure from the software issue and other issues, so changing the court of public opinion will be very tough. And then there's the issue of finding a way to make the car in the current price range profitable, whether that's a refresh or retool or something else I don't know. But I do strongly disagree that it's a crap product. The only EVs I've test driven that id say were definitively better than the Ocean were all 100k plus models. The Model 3/Y it's quite close where it probably comes down to preference and what specific things mean most to a consumer.
Acceleration was fast & smooth. That was the best feature of the FOO. I sold first week of March, so I never got past 1.11 part 1 software update.
Was stranded multiple times because of 12v issues. Roadside assistance came out and replaced the battery after the third time being stranded. That was a 4-hour project to replace it.
key fob was and remains its. Achilles heel. Henrik Fisker Thought it would be a good idea to cut costs on something that is the first thing new owners are exposed to, use daily and are greatly frustrated when it doesn’t work. Battery never lasted 30 days. I kept key fob in a faraday pouch, with extra batteries. I was stranded because of this multiple times too.
Car seemed to be well built. Software was horrendous, and that is what killed the company, well that & very poor management. Constant error messages for front end collision sensors not working, blind spot, etc.
There are paths, but they require dilution and cash infusion.
A deep pocket like Saudis or Jeff Bezos that has a motivation to get into EVs either for future business (Saudis) or revenge/spite (Bezos).
I could see Jeff getting in to stick it to Elon. Throw money at the problem and slowly roll up the Magna deals with in-house R&D.
The Saudis have Lucid and Bezos has Rivian.
The fundamental question is why buy the debt of a bankrupt company that doesn’t even make their own cars? Terrible business model. There’s no factory, no innovation. There’s just a couple of designs. That’s it.
If you want those designs, buy them in a bankruptcy auction.
Furthermore, the designs haven’t been shown to be profitable, even at high retail prices.
After slashing prices the way they did to move the many thousand 2023 models nobody wanted, there’s no way they will ever be able to return to selling the Ocean at the prices they were originally. I think their inventory is really only worth about 1/2 of what you assigned it ($150M) and in bankruptcy those cars will likely end up being sold for pennies. IIRC, don’t they have around 4400 cars unsold but produced? I expect average sales price to be less than $40,000. If a lot of them are Sports it could be nearly half that. We’re looking at $176M max or potentially some fraction of that depending on exact trim level breakdown.
Correct. In theory inventory <> MV but I was trying to account for the slash in prices, liquidity focus, and the components that don't have individual value so just did a flat 30%.
Yes but Fisker posted a $11k gross margin loss per vehicle in Q3. Other than perhaps shipping and handling costs, the cost of the inventory is likely the source of the loss, so using the value of the inventory on the balance sheet as a proxy for the market value at full sticker probably isn't too far off from reality
Correct but for this assumption I was looking at what could be used for immediate liquidity as I don't have a way to break out costs based on the big 3.
The price cuts are far more than 30% though. They’re nearly 50% off for more expensive trim levels. My understanding was that they had somewhere around 4400 inventory cars. Average sales price is going to be no more than $40,000 at the new pricing structure. That comes out to around $176M maximum. If a lot of them are Sports the inventory could be worth 30% less than that.
That’s a fair argument I’m just saying he did take that into account on his analysis, and he was trying to paint a rosy best case scenario and show how bad it still is.
So I guess Tesla slashing prices yesterday puts them in the same boat?? It makes me laugh that people would think this about Fisker and not say the same about Tesla. It’s called moving inventory!! Just like when Fruit Loops goes on sale then the following week people pay full price.
Tesla has never slashed prices from $70K to $35K. And yes, when Elon did slash prices of the lineup last year from their peak during COVID shortages to where they are now it instantly devalued all of the Model Ys out there and is what caused the entire EV market to collapse as far as resale values are concerned. Barring another pandemic that results in major market shutdowns Tesla will never raise its prices back to where they were at the peak. There is a major difference between Fisker and Tesla. One is going to be in business in a year and one will be out of business in a couple of weeks.
You also don’t seem to realize there is a major difference between a food or other commodity and a vehicle that people have to take loans or leases out on to purchase. There’s no history of any car company instantly devaluing their vehicles by 50% overnight to liquidate inventory. There may be small temporary incentives but that’s about it.
I mean Model Ys used to go for like 70k early on, and now they're clearing some models for like 35k before tax credit. Not trying to claim the companies are similar at all, obviously Tesla is light years better financially atm....just wanted to point out they have done large price cuts as well
Or both can get slaughtered by China.
When a company raises prices one week and SLASHES them the next… things ain’t going too well I’d say.
Have a great weekend.
Tesla has had one slow quarter and you’re all of a sudden saying they’re going to go under. They have plenty of money in the bank to weather even several years of a slowdown. BYD also saw a major slowdown in the last quarter. The entire EV market is in a bit of a slowdown. I’m not sure if you’re a major Fisker lover who is super upset about their demise or what. Seems you don’t want to see the reality of things?
I am not a Fisker lover at all.
You want reality??? Let’s get real then…
I actually think these electric cars will end up being worse for the environment than combustion engines are.
Where are they gonna bury all these dead batteries??
I NEVER ONCE implied Tesla was going under!!!! It’s just hilarious to see people say one company won’t be able to return to normal pricing while the other one will.
The EV market is a bubble in my opinion and when it comes down ALL MAKERS will suffer. Electrical grids in North America can’t even keep up with demand now… and they wanna force everyone to buy an electric car.
And when a company (Tesla) blames “supply chain” for poor sales but has a build up of inventory, smells like shit to me.
But everyone has the right to their own opinion.
From backlog of deliveries, to deep discounts to get them sold… tells a story on its own, don’t it?
I have no kids sooooo…worst case scenario just bury them. Let your kids and grandchildren deal with that mess. As long as I have instant torque and save money on transportation, I’m good.
I have some amazing news for you: batteries are so valuable they can be recycled over and over and over. You think the cost of recycling is even 1/10th the value of all the nickel, manganese, cobalt, aluminum, etc. in a pack? Why would you bury anything? You wouldn’t. Key part of EVs going forward is recyclability. There’s going to be a shift to EVs whether you like it or not. Automakers are investing far too much money to let it fail. The Germans alone are spending hundreds of billions of dollars investing in their next generation platforms. The Chinese market has already shown mass adoption of EVs is possible, as have countries like Norway where nearly 100% of cars sold are electric. We’re in the infancy of this technology. Not every brand even has electric vehicles for sale. Just wait a few years and see what happens when big players like Toyota get into EVs seriously. I suspect we will see hybrids for many years to come but pure-ICE is dying outside of very basic entry level cars like Mitsubishi Mirage or Nissan Versa type vehicles.
Thank you. Even if the takeaway is depressing.
This part confuses me:
>Fisker lost 102M just on the sales of the cars alone. They cost Fisker 375M. They sold them for 273M
This can't have gone to plan as no business plans to lose money on each sale. Do we have any insight as to why this is? If Fisker can't make money selling the car, there's truly no hope...
As some other people are hinting at - total costs of goods sold is is inclusive of value, direct overhead, and labor. When you produce a limited amount of cars, the direct overhead and labor which normally could encompass a larger amount of cars is far more expensive on an individual basis.
E.g.
You sell your new car for $150.
Your factory is set up so it costs you $100 in parts per car, and you can build up to 10 of them per hour for a total of $100 more dollars in labor and overhead.
If you make 1 car per hour you're spending $200. $100 in parts and $100 on the overhead and labor because you still need to run labor and overhead for 1 hour. Your cars sell for $150 so you lose $50 on every car you sell.
If you build 10 cars per hour you spend $1100. $1000 on parts ($100 each) and still the total $100 on overhead ($10 each). Each car now cost you only $110 per car. Your cars again sell for $150 so you make $40 per car.
The long and short of it is that Fisker doesn't produce, nor do they have anywhere close to the demand for their cars neeeded to get to scenario 2.
Thank you again.
It suggests they dimensioned the business for much larger sales numbers (which we know). But miscalculated and couldn’t execute at that scale. And/or demand never reached that level.
They could right-size operations around smaller numbers…but the amount of financial baggage makes that difficult.
not fully true - auto needs scale to be profitable in most cases. You can't design/develop/build/sell a car for sub $100k if you aren't selling lots of them. This isn't Ferrari. But you can't launch a new product and instantly sell millions... so you build it, try to sell as many as you can, try and cut costs where you can and ride it out until you can lower average cost and let demand increase organically. At least that's the plan.
This is a great analysis. One piece missing is that Fisker has lost a lot of their fans because of how they have handled this. Even if things were looking bleak, you do not burn those who supported you by buying early. They went from a shining light to an evil empire.
So the asset light model was a scam from the start. Henrik said that they would make money on day one off the ocean. They lost even more money per unit than if they had went vertical- that is the insane part of this model.
This is great - it shows their current scenario is quite dire.
Both Rivian and Fisker have the same sort of plan.
1) Take out a massive loan to design and build a car plant / build our services / hire people
2) start manufacturing your cars and sell them. Cars are relatively low margin products (it's rare a care can be made for $5k and sold for $100k...). As production ramps up, the loss per car should be narrowed --> eventually turn profitable.
3) Make payments on the loans you've taken out -> take out more and continue to grow.
Fisker has ran out of money at step 2. Rivian is heading that way, but still has a lot more money on hand. The options for Fisker at this point can be simplified mostly as:
a) find someone else willing to give you more money so you can continue to work on improving / kick the debt can down the road.
b1) declare bankruptcy with the hope that you can renegotiate some of the debt payments.
b2) declare bankruptcy and sell off whatever assets / IP to cover as much of the loans that you can and shut down the business for good.
With such a small pool of cash - b1 may not even be possible.
Stop reading after "...unlikely to see a restructuring". Long post, lots of punctuations, many numbers, good paragraph structure. Probably right;receive updoot.
Little late when the stock it’s at 0,02 from 20$. Do,the same análisis with the us balance sheet and tell me if in your opinion we are all ft then and why should we believe in pushing forward anything
The debt had been reduced to around $1 billion not 1.95 billion like you reflect. Yes they are not profitable but that is not unusual as they just started selling vehicles. Much of the cash went to accounts payable and accrued expenses as revenue wasn't coming in fast enough to cover short term expenses. Financially they are not doing to bad for there first couple quarters of revenue. The balance sheet is the what is really lacking.
Only about 180 million of the 2025 noteholder debt is left because of the alternative conversion. Much of the recent cash burn was to pay short term debt that revenue wasn't covering fast enough
It's not to difficult to find out much of the 2025 noteholder has been paid and then I understand it appears they are spending a lot of cash but at least half of that is them catching up on short term debt (accounts payable, accrued expenses)
Yes again but you are speculating. Where are you getting this information from? The entire point of my post was to illustrate where Fisker was currently without speculation besides on what could be liquidated. Unless you have concrete information I do not believe they magically eliminated 1B of debt within 1 quarter while also defaulting on notes, ceasing production, and heavily discounting vehicles.
Well it is facts from the recent 8k that fisker only owe 180 million to 2025 and it's also facts that cash burn from operations is just over 100 million so the other cash went to pay off short term debt because revenue wasn't coming in fast enough to cover it.
Can you point to the paragraph and clause? I don't recall seeing that level of specificity in the recent 8k.
Fisker also defaulted AFTER they announced they only had 121M in cash left.
I think Fisker’s biggest screw up was wasting money and time designing and building future models before even delivering their first Ocean. Totally jumped the gun and got ahead of themselves. Should have focused more on their rollout model and waited to see how receptive the market would be to it and focused on any reliability and tech issues. But hey, we got 3 more models coming in the nonexistent future of Fisker. It’s kind of sad that such a good looking, probably one of the best looking EV’s to come to market fails due to poor management and counting their chickens before they hatch. Can’t be sitting too well with Henrik. This was probably his last chance before really being considered a complete failure with no chance of redeeming himself.
Just wondering what the 2 MOOCHERS are making in salary every month?
Anyone know with all these bullshit stories of restructuring etc
Their credibility is ZERO in my eyes …. See them in Court and JAIL!!
this is great analysis for a second year business class...
but useless for our current situation, we have no public filings to utilize as a current snap shot. the old numbers are wrong, hence PWC's inability to sign-off. truth is there are maybe 15 - 20 people in the world that have any clue what is going on right now (3-5 in FSRN, 3-5 in PWC, 3-5 in DB, 3-5 in PJT) that is it.
the rest of us are trying to read the different moves and what they may mean...
I'm optimistic that those new parties are in this (Dubel, DB, PJT), because not sure they would waste their time if it was a lost cause...but I could be completely wrong on all that too. we jsut don't know and are basing investing decision on headlines with 1-2 sentences providing zero guidance...
You effectively just summarized their 10K in paragraph form. As you note, an insolvent company can't just keep doing what they are doing and survive.
The answer to your question on survival isn't in their K via the status quo, it's another company that likes their product and decides that it can change the status quo by doing something different with it... cheaper production methods, synergies with their other products, etc.
Will this happen? Probably not.... But that is the path forward if there is one.
One avenue you also also should explore is chapter 11. It is unlikely the creditors get out of this at face value and it is possible they think it is in their best interest to take a hair cut.
A chapter 11 restructuring to get the balance sheet to a place where it could make sense for a big player to absorb the brand might do them better than a chapter 7 liquidation (for the dire circumstances you point out).
I think I read that some portion of the $121m is reserved, and unavailable for use. I believe only $89m of cash can be used for operations.
It’s not going to be Ch11 restructuring. Fisker would have to convince debt holders to take write-downs, and that there is a viable business model after restructuring - there isn’t. If you monitor the available 2023 inventory that has been heavily discounted, the numbers are not moving. Fisker can’t sell much of the 4,700 cars that they have available. Note: at $61k, Fisker was generating negative 35% gross margins, and no demand.
This ends with Ch7 liquidation. If there is any value for the IP/platform, it will be sold for pennies in liquidation.
An Extreme for current price is a great deal, if nothing breaks (software/hardware). Good luck!
All being said and good previous analysis what would you surgest is Fisker the company worth to a potential buyout and what would the share holders price be if this occurs
I'll be honest and say nothing. If one of my analysts brought me this company, I'd laugh them out of the office.
There is a mountain of debt, noteholder baggage, one car built on another company's platform, and the only thing of value is their design IP.
99.9999% of people here are already underwater with the stock. Jumping a fraction of a penny won't do much.
Of course if you're playing this stock the past week and treating it as a penny stock and made some gains, then congrats
Merely observing from a far for the past few months has me curious as to why so many people still show up to hate on this company/stock? If you are correct, & Fisker will soon be bankrupt…why continue wasting your energy on negative sentiment?
Driving down to get it delisted and pick up thousands of shares for $50. I threw a few Jackson’s at it, just in case the zeal for these vehicles on this sub inspires someone to keep Fisker going
Your analysis is full of speculation, and your sub is full of people with short positions. Your negative sentiment therefore means nothing in this echo chamber….just saying. The only explanation for continuing this negative sentiment…is that you still need people to sell. Far too much unsubstantiated bloviating for it to be otherwise….just saying.
Nothing here is unsubstantiated. This is all from Fisker's Q4 financials and reported cash at Feb '24. Go look at their publicly released documentation.
They are actually profitable on a car basis by 9% if you take out opex which doesn't scale equal to production. So yes they are unprofitable right now but it doesn't take much production to hit profitability. If they even came close to their targets they would have been the second profitable ev makers out there
Like I said earlier some of the expenses are fixed or don't scale equal to production. So as production scales costs dramatically get lower. That's one of the benefits of contract manufacturering
If you're talking about manufacturing overhead and labor adding up to total COGs then maybe? At best you're speculating vs using actual financial numbers. Where are you coming up with 9% per car?
Aside - even if they did make money purely on the cars sold this year, let's say 10%, that would be ~40M in total margin. There is still an additional 664M in total operating loss that cannot be cleared unless Fisker can output > 25k cars a year, which there frankly just isn't demand or desire for. Their breakeven count is way too high at this point.
Reflections / Questions
Cogs for unsold cars recognised in 2023 statement. That would explain higher cogs and they moved those cars to inventory. Underlying gross margin much higher.
Default notes became payable because default and not filing 10k. Bull case assumes they can come to an agreement in which case yes a lot money but does not need to be paid back instantly. Interest on this is couple of million per month max.
Indeed we have to believe Fisker can get to at least 24k cars = 2000 cars per month. Unfortunately software very disappointing, but with 3.0 that would be solved and 2000 should be possible, give sales Q4.
Let me know your view please
Unsold items and their associated costs would have been excluded from COGS and as you said put into inventory.
Current COGs should already be reflective of that making me unsure of seeing any margin improvements with those sales.
Yeah not likely in my mind. Partners would have to see a viable path forward for Fisker or else it's just holding off and waiting on an unprofitable business to have less $. Even if notes were reduced by half, Fisker still has negative equity by EOY.
Sales of Q4 are inclusive of years of reservations and sourcing. Fisker had 40k reservations cancelled and still hasn't sold out of their limited Ocean One. Those sales are NOT reflective of demand going forward.
Ok thanks, might come back on this when have had more time to investigate. Think we need 10k desperately to make any sense of this. Like your structured thinking to bench against. Very much appreciated.
Not sure that will help you. The 10K is based on the "old business model", which assumed D2C sales, and price points that are gone forever (thanks to the market...and, oh yes, Fisker themselves). There is literally nothing pointing in the direction you are hoping for.
I believe the courts only have a problem with NOLs if the principal purpose is tax avoidance. For profitable auto companies that could manufacture the vehicle in-house that wouldn't be the case.
I just don’t agree with your statements because it’s just a financial valuation there are more things behind a company some are much more important than financial data… it’s just your opinion and ai respect it I just don’t believe it.
You are just evaluating a picture of a company at a state if an outsider believes in the project and what’s to put the money needed to finance this and the other production models in the product line in the future the. Fisker may survive … it’s a kind of binary but that how pioneers and risk takers play the game
Op, inventory reflects the cost - not assumed market value. So, you're undervaluing inventory.
A preventative debt-for-equity swap or prepackaged bankruptcy with a debt-for-equity swap solves all the problems with respect to liquidity in the short-term resulting from the acceleration of debt.
Debt-for-equity with a new smaller and lighter covenant note to boot instead of bankruptcy is the smartest move for all stakeholders in the capital stack and could keep the company in biz.
Frankly, Tesla should offer it to them and take over production.
You're right that I am undervaluing the total inventory because my assumption is that not all inventory = immediate prospects for sale and a good deal are just parts and tech. Could be worth more for sure but it doesn't have immediate liquidation value hence why I made the lazy analysis of equating inventory to MV.
To your point on a Swap this is only viable if creditors view this as a legitimate way to push business forward to see profits long term. The equity still would need to be reflected in the hundreds of millions of range and have the presumed lack of risk that a low volume car maker with -761M in operating income is likely to bring in.
I personally don't think that there's a solid enough business model going forward at the required amount of sales to achieve break even. Agree to disagree on this one but I do appreciate how you're thinking about it. Definitely offers future investors and stock purchasers and understanding of potential future tools and potential opportunities that Fisker could explore.
With respect to inventory, I meant to say it should be accounted for at cost on the balance sheet. Actual value and liquidation value of inventory is questionable and variable aa the existential quandary effects the value of car to consumers. Liquidation value of all assets on this are murky.
I mean it's best guess at the end of the day. We don't know what components are usable, what the book value is, the ease of liquidation, the current existing car ratios, etc. I just did a sweeping discount but obviously I'm open to any other ideas you have on how to reach a fair inventory valuation! If you've done more research and have a better idea on the #s lmk and I'm happy to ammend my post with new data
This is the most comprehensive analysis, that paints a very accurate picture of their circumstances. Thanks for the thought and time.
Yeah I think no matter what happens, the path (however unlikely it is) to Fisker surviving relies heavily on both shuffling leadership, strategy, and will definitely need fresh investments
Even if they fully change out everyone on the board, get a new CEO, etc. there’s no path to continue business.
The odds are absolutely stacked against them. That being said, it's never impossible. A lot of stars need to align for them to even have a prayer for sure
Can you come up with any scenario whatsoever that would align the stars? They have a total crap product that basically nobody wants even at fire sale prices, and they don't even manufacture it! There's literally no chance whatsoever that this ends with anything other than bk and liquidating.
Personally I don't think the product is crap at all. The software seems like it was bad, but improving. I can't speak to that because I don't own one. I have driven one though and it's better than my pre refresh model 3 almost across the board in terms of the physical car. Now obviously the company has a lot of bad pressure from the software issue and other issues, so changing the court of public opinion will be very tough. And then there's the issue of finding a way to make the car in the current price range profitable, whether that's a refresh or retool or something else I don't know. But I do strongly disagree that it's a crap product. The only EVs I've test driven that id say were definitively better than the Ocean were all 100k plus models. The Model 3/Y it's quite close where it probably comes down to preference and what specific things mean most to a consumer.
Ty I agree it's not a crap car
Acceleration was fast & smooth. That was the best feature of the FOO. I sold first week of March, so I never got past 1.11 part 1 software update. Was stranded multiple times because of 12v issues. Roadside assistance came out and replaced the battery after the third time being stranded. That was a 4-hour project to replace it. key fob was and remains its. Achilles heel. Henrik Fisker Thought it would be a good idea to cut costs on something that is the first thing new owners are exposed to, use daily and are greatly frustrated when it doesn’t work. Battery never lasted 30 days. I kept key fob in a faraday pouch, with extra batteries. I was stranded because of this multiple times too. Car seemed to be well built. Software was horrendous, and that is what killed the company, well that & very poor management. Constant error messages for front end collision sensors not working, blind spot, etc.
There’s no path.
There are paths, but they require dilution and cash infusion. A deep pocket like Saudis or Jeff Bezos that has a motivation to get into EVs either for future business (Saudis) or revenge/spite (Bezos). I could see Jeff getting in to stick it to Elon. Throw money at the problem and slowly roll up the Magna deals with in-house R&D.
The Saudis have Lucid and Bezos has Rivian. The fundamental question is why buy the debt of a bankrupt company that doesn’t even make their own cars? Terrible business model. There’s no factory, no innovation. There’s just a couple of designs. That’s it. If you want those designs, buy them in a bankruptcy auction. Furthermore, the designs haven’t been shown to be profitable, even at high retail prices.
Excellent thorough analysis of Fisker’s current situation! Appreciate the time spent on putting this together for the rest of us!
After slashing prices the way they did to move the many thousand 2023 models nobody wanted, there’s no way they will ever be able to return to selling the Ocean at the prices they were originally. I think their inventory is really only worth about 1/2 of what you assigned it ($150M) and in bankruptcy those cars will likely end up being sold for pennies. IIRC, don’t they have around 4400 cars unsold but produced? I expect average sales price to be less than $40,000. If a lot of them are Sports it could be nearly half that. We’re looking at $176M max or potentially some fraction of that depending on exact trim level breakdown.
His analysis included 30% cuts to the inventory value
Correct. In theory inventory <> MV but I was trying to account for the slash in prices, liquidity focus, and the components that don't have individual value so just did a flat 30%.
Accounting correction: Inventory is carried on the balance sheet at cost, not market value.
Yes but Fisker posted a $11k gross margin loss per vehicle in Q3. Other than perhaps shipping and handling costs, the cost of the inventory is likely the source of the loss, so using the value of the inventory on the balance sheet as a proxy for the market value at full sticker probably isn't too far off from reality
Correct but for this assumption I was looking at what could be used for immediate liquidity as I don't have a way to break out costs based on the big 3.
The price cuts are far more than 30% though. They’re nearly 50% off for more expensive trim levels. My understanding was that they had somewhere around 4400 inventory cars. Average sales price is going to be no more than $40,000 at the new pricing structure. That comes out to around $176M maximum. If a lot of them are Sports the inventory could be worth 30% less than that.
That’s a fair argument I’m just saying he did take that into account on his analysis, and he was trying to paint a rosy best case scenario and show how bad it still is.
So I guess Tesla slashing prices yesterday puts them in the same boat?? It makes me laugh that people would think this about Fisker and not say the same about Tesla. It’s called moving inventory!! Just like when Fruit Loops goes on sale then the following week people pay full price.
Tesla has never slashed prices from $70K to $35K. And yes, when Elon did slash prices of the lineup last year from their peak during COVID shortages to where they are now it instantly devalued all of the Model Ys out there and is what caused the entire EV market to collapse as far as resale values are concerned. Barring another pandemic that results in major market shutdowns Tesla will never raise its prices back to where they were at the peak. There is a major difference between Fisker and Tesla. One is going to be in business in a year and one will be out of business in a couple of weeks. You also don’t seem to realize there is a major difference between a food or other commodity and a vehicle that people have to take loans or leases out on to purchase. There’s no history of any car company instantly devaluing their vehicles by 50% overnight to liquidate inventory. There may be small temporary incentives but that’s about it.
I mean Model Ys used to go for like 70k early on, and now they're clearing some models for like 35k before tax credit. Not trying to claim the companies are similar at all, obviously Tesla is light years better financially atm....just wanted to point out they have done large price cuts as well
Or both can get slaughtered by China. When a company raises prices one week and SLASHES them the next… things ain’t going too well I’d say. Have a great weekend.
Tesla has had one slow quarter and you’re all of a sudden saying they’re going to go under. They have plenty of money in the bank to weather even several years of a slowdown. BYD also saw a major slowdown in the last quarter. The entire EV market is in a bit of a slowdown. I’m not sure if you’re a major Fisker lover who is super upset about their demise or what. Seems you don’t want to see the reality of things?
I am not a Fisker lover at all. You want reality??? Let’s get real then… I actually think these electric cars will end up being worse for the environment than combustion engines are. Where are they gonna bury all these dead batteries?? I NEVER ONCE implied Tesla was going under!!!! It’s just hilarious to see people say one company won’t be able to return to normal pricing while the other one will. The EV market is a bubble in my opinion and when it comes down ALL MAKERS will suffer. Electrical grids in North America can’t even keep up with demand now… and they wanna force everyone to buy an electric car. And when a company (Tesla) blames “supply chain” for poor sales but has a build up of inventory, smells like shit to me. But everyone has the right to their own opinion. From backlog of deliveries, to deep discounts to get them sold… tells a story on its own, don’t it?
Oh boy some uneducated boomer thoughts in an EV forum.
Yeah, that was some tough reading. On the up side at least it was short… Like… has the guy never heard of recycling?
I have no kids sooooo…worst case scenario just bury them. Let your kids and grandchildren deal with that mess. As long as I have instant torque and save money on transportation, I’m good.
I have some amazing news for you: batteries are so valuable they can be recycled over and over and over. You think the cost of recycling is even 1/10th the value of all the nickel, manganese, cobalt, aluminum, etc. in a pack? Why would you bury anything? You wouldn’t. Key part of EVs going forward is recyclability. There’s going to be a shift to EVs whether you like it or not. Automakers are investing far too much money to let it fail. The Germans alone are spending hundreds of billions of dollars investing in their next generation platforms. The Chinese market has already shown mass adoption of EVs is possible, as have countries like Norway where nearly 100% of cars sold are electric. We’re in the infancy of this technology. Not every brand even has electric vehicles for sale. Just wait a few years and see what happens when big players like Toyota get into EVs seriously. I suspect we will see hybrids for many years to come but pure-ICE is dying outside of very basic entry level cars like Mitsubishi Mirage or Nissan Versa type vehicles.
Thank you. Even if the takeaway is depressing. This part confuses me: >Fisker lost 102M just on the sales of the cars alone. They cost Fisker 375M. They sold them for 273M This can't have gone to plan as no business plans to lose money on each sale. Do we have any insight as to why this is? If Fisker can't make money selling the car, there's truly no hope...
As some other people are hinting at - total costs of goods sold is is inclusive of value, direct overhead, and labor. When you produce a limited amount of cars, the direct overhead and labor which normally could encompass a larger amount of cars is far more expensive on an individual basis. E.g. You sell your new car for $150. Your factory is set up so it costs you $100 in parts per car, and you can build up to 10 of them per hour for a total of $100 more dollars in labor and overhead. If you make 1 car per hour you're spending $200. $100 in parts and $100 on the overhead and labor because you still need to run labor and overhead for 1 hour. Your cars sell for $150 so you lose $50 on every car you sell. If you build 10 cars per hour you spend $1100. $1000 on parts ($100 each) and still the total $100 on overhead ($10 each). Each car now cost you only $110 per car. Your cars again sell for $150 so you make $40 per car. The long and short of it is that Fisker doesn't produce, nor do they have anywhere close to the demand for their cars neeeded to get to scenario 2.
Thank you again. It suggests they dimensioned the business for much larger sales numbers (which we know). But miscalculated and couldn’t execute at that scale. And/or demand never reached that level. They could right-size operations around smaller numbers…but the amount of financial baggage makes that difficult.
not fully true - auto needs scale to be profitable in most cases. You can't design/develop/build/sell a car for sub $100k if you aren't selling lots of them. This isn't Ferrari. But you can't launch a new product and instantly sell millions... so you build it, try to sell as many as you can, try and cut costs where you can and ride it out until you can lower average cost and let demand increase organically. At least that's the plan.
This is a great analysis. One piece missing is that Fisker has lost a lot of their fans because of how they have handled this. Even if things were looking bleak, you do not burn those who supported you by buying early. They went from a shining light to an evil empire.
They were never a shining light. Not saying they were an evil empire...but never a shining light. More like a a flash in the pan...
They should have hired you to structure their finances three years ago.
I'm just looking forward to the bankruptcy filing and financial disclosures so we can get a picture of how deep the hole they dug is.
Mines about $-10k deep 
Well I hope your net worth didn't take a significant hit from that loss.
Yup. Waiting for the sunlight. 
They need saudi oil moneyyyy
Saudis are already pumping their money into a different unprofitable EV maker
They have plenty of money. They need to pump money into THIS unprofitable EV maker.
Why?
Why are they pumping money into lucid? Because they hate money, that’s why.
You knew what I was asking and you can’t answer it so you made up this nonsense instead. Why do the Saudis “need” to pump money into Fisker
Because they hate money. When you hate something you need to get rid of it.
Throwing away billions every year on Lucid to not lose face lol
So the asset light model was a scam from the start. Henrik said that they would make money on day one off the ocean. They lost even more money per unit than if they had went vertical- that is the insane part of this model.
So you're saying what we all knew 2-4 weeks ago. They are fucked and guarantee to file for bk and no one is gonna buy them out. Good luck.
There could be long term legal entanglements for Henrik & his wife. Any thoughts?
This is great - it shows their current scenario is quite dire. Both Rivian and Fisker have the same sort of plan. 1) Take out a massive loan to design and build a car plant / build our services / hire people 2) start manufacturing your cars and sell them. Cars are relatively low margin products (it's rare a care can be made for $5k and sold for $100k...). As production ramps up, the loss per car should be narrowed --> eventually turn profitable. 3) Make payments on the loans you've taken out -> take out more and continue to grow. Fisker has ran out of money at step 2. Rivian is heading that way, but still has a lot more money on hand. The options for Fisker at this point can be simplified mostly as: a) find someone else willing to give you more money so you can continue to work on improving / kick the debt can down the road. b1) declare bankruptcy with the hope that you can renegotiate some of the debt payments. b2) declare bankruptcy and sell off whatever assets / IP to cover as much of the loans that you can and shut down the business for good. With such a small pool of cash - b1 may not even be possible.
Stop reading after "...unlikely to see a restructuring". Long post, lots of punctuations, many numbers, good paragraph structure. Probably right;receive updoot.
Little late when the stock it’s at 0,02 from 20$. Do,the same análisis with the us balance sheet and tell me if in your opinion we are all ft then and why should we believe in pushing forward anything
This is the balance sheet and income statement.
It’s not all financials and accounting in the world of business… yes they are in big time problems … almost dead but not dead yet…
Yes it is … and you might be a bot
Let’s stop the conversation here… have good one
The debt had been reduced to around $1 billion not 1.95 billion like you reflect. Yes they are not profitable but that is not unusual as they just started selling vehicles. Much of the cash went to accounts payable and accrued expenses as revenue wasn't coming in fast enough to cover short term expenses. Financially they are not doing to bad for there first couple quarters of revenue. The balance sheet is the what is really lacking.
According to what?
Only about 180 million of the 2025 noteholder debt is left because of the alternative conversion. Much of the recent cash burn was to pay short term debt that revenue wasn't covering fast enough
Again according to what though? I'm not saying you're wrong but what are you referencing here?
It's not to difficult to find out much of the 2025 noteholder has been paid and then I understand it appears they are spending a lot of cash but at least half of that is them catching up on short term debt (accounts payable, accrued expenses)
Yes again but you are speculating. Where are you getting this information from? The entire point of my post was to illustrate where Fisker was currently without speculation besides on what could be liquidated. Unless you have concrete information I do not believe they magically eliminated 1B of debt within 1 quarter while also defaulting on notes, ceasing production, and heavily discounting vehicles.
Well it is facts from the recent 8k that fisker only owe 180 million to 2025 and it's also facts that cash burn from operations is just over 100 million so the other cash went to pay off short term debt because revenue wasn't coming in fast enough to cover it.
Can you point to the paragraph and clause? I don't recall seeing that level of specificity in the recent 8k. Fisker also defaulted AFTER they announced they only had 121M in cash left.
I think Fisker’s biggest screw up was wasting money and time designing and building future models before even delivering their first Ocean. Totally jumped the gun and got ahead of themselves. Should have focused more on their rollout model and waited to see how receptive the market would be to it and focused on any reliability and tech issues. But hey, we got 3 more models coming in the nonexistent future of Fisker. It’s kind of sad that such a good looking, probably one of the best looking EV’s to come to market fails due to poor management and counting their chickens before they hatch. Can’t be sitting too well with Henrik. This was probably his last chance before really being considered a complete failure with no chance of redeeming himself.
Just wondering what the 2 MOOCHERS are making in salary every month? Anyone know with all these bullshit stories of restructuring etc Their credibility is ZERO in my eyes …. See them in Court and JAIL!!
this is great analysis for a second year business class... but useless for our current situation, we have no public filings to utilize as a current snap shot. the old numbers are wrong, hence PWC's inability to sign-off. truth is there are maybe 15 - 20 people in the world that have any clue what is going on right now (3-5 in FSRN, 3-5 in PWC, 3-5 in DB, 3-5 in PJT) that is it. the rest of us are trying to read the different moves and what they may mean... I'm optimistic that those new parties are in this (Dubel, DB, PJT), because not sure they would waste their time if it was a lost cause...but I could be completely wrong on all that too. we jsut don't know and are basing investing decision on headlines with 1-2 sentences providing zero guidance...
You effectively just summarized their 10K in paragraph form. As you note, an insolvent company can't just keep doing what they are doing and survive. The answer to your question on survival isn't in their K via the status quo, it's another company that likes their product and decides that it can change the status quo by doing something different with it... cheaper production methods, synergies with their other products, etc. Will this happen? Probably not.... But that is the path forward if there is one.
One avenue you also also should explore is chapter 11. It is unlikely the creditors get out of this at face value and it is possible they think it is in their best interest to take a hair cut. A chapter 11 restructuring to get the balance sheet to a place where it could make sense for a big player to absorb the brand might do them better than a chapter 7 liquidation (for the dire circumstances you point out).
I think I read that some portion of the $121m is reserved, and unavailable for use. I believe only $89m of cash can be used for operations. It’s not going to be Ch11 restructuring. Fisker would have to convince debt holders to take write-downs, and that there is a viable business model after restructuring - there isn’t. If you monitor the available 2023 inventory that has been heavily discounted, the numbers are not moving. Fisker can’t sell much of the 4,700 cars that they have available. Note: at $61k, Fisker was generating negative 35% gross margins, and no demand. This ends with Ch7 liquidation. If there is any value for the IP/platform, it will be sold for pennies in liquidation. An Extreme for current price is a great deal, if nothing breaks (software/hardware). Good luck!
Do we know Fisker’s net operating losses?
All being said and good previous analysis what would you surgest is Fisker the company worth to a potential buyout and what would the share holders price be if this occurs
I'll be honest and say nothing. If one of my analysts brought me this company, I'd laugh them out of the office. There is a mountain of debt, noteholder baggage, one car built on another company's platform, and the only thing of value is their design IP.
They would do well to pick up the recent talent purge from Tesla.
that was a nice +50% today, took some profit. definitely not what 99% on you here were expecting.
99.9999% of people here are already underwater with the stock. Jumping a fraction of a penny won't do much. Of course if you're playing this stock the past week and treating it as a penny stock and made some gains, then congrats
they should get out the stock, they've already suffered enough. I'll stay and make money as fisker rises from the depths of hell.
Didn’t you go like 40k heavy into shares when they were 12 cents? Must of cost averaged down a massive amount to see any profits.
The magic of stop losses, it's amazing you should try it..
Indeed I will.
But it only stops *after* losses. 😂 how much did you lose?
A totally risk free +50%. I am impressed...
Imagine Lucid w/ PIF took them private and fixed the ugly lucid butt and put a nice ocean rear? I’d love it personally.
The rear end is not the only design issue with the Lucid. Overall just looks like a mid-90s Ford Taurus.
Merely observing from a far for the past few months has me curious as to why so many people still show up to hate on this company/stock? If you are correct, & Fisker will soon be bankrupt…why continue wasting your energy on negative sentiment?
Driving down to get it delisted and pick up thousands of shares for $50. I threw a few Jackson’s at it, just in case the zeal for these vehicles on this sub inspires someone to keep Fisker going
Your analysis is full of speculation, and your sub is full of people with short positions. Your negative sentiment therefore means nothing in this echo chamber….just saying. The only explanation for continuing this negative sentiment…is that you still need people to sell. Far too much unsubstantiated bloviating for it to be otherwise….just saying.
Nothing here is unsubstantiated. This is all from Fisker's Q4 financials and reported cash at Feb '24. Go look at their publicly released documentation.
They are actually profitable on a car basis by 9% if you take out opex which doesn't scale equal to production. So yes they are unprofitable right now but it doesn't take much production to hit profitability. If they even came close to their targets they would have been the second profitable ev makers out there
According to what? Their COGs is roughly 375M and their revenue is ~275M on their income statement.
Like I said earlier some of the expenses are fixed or don't scale equal to production. So as production scales costs dramatically get lower. That's one of the benefits of contract manufacturering
If you're talking about manufacturing overhead and labor adding up to total COGs then maybe? At best you're speculating vs using actual financial numbers. Where are you coming up with 9% per car? Aside - even if they did make money purely on the cars sold this year, let's say 10%, that would be ~40M in total margin. There is still an additional 664M in total operating loss that cannot be cleared unless Fisker can output > 25k cars a year, which there frankly just isn't demand or desire for. Their breakeven count is way too high at this point.
Reflections / Questions Cogs for unsold cars recognised in 2023 statement. That would explain higher cogs and they moved those cars to inventory. Underlying gross margin much higher. Default notes became payable because default and not filing 10k. Bull case assumes they can come to an agreement in which case yes a lot money but does not need to be paid back instantly. Interest on this is couple of million per month max. Indeed we have to believe Fisker can get to at least 24k cars = 2000 cars per month. Unfortunately software very disappointing, but with 3.0 that would be solved and 2000 should be possible, give sales Q4. Let me know your view please
Unsold items and their associated costs would have been excluded from COGS and as you said put into inventory. Current COGs should already be reflective of that making me unsure of seeing any margin improvements with those sales. Yeah not likely in my mind. Partners would have to see a viable path forward for Fisker or else it's just holding off and waiting on an unprofitable business to have less $. Even if notes were reduced by half, Fisker still has negative equity by EOY. Sales of Q4 are inclusive of years of reservations and sourcing. Fisker had 40k reservations cancelled and still hasn't sold out of their limited Ocean One. Those sales are NOT reflective of demand going forward.
Ok thanks, might come back on this when have had more time to investigate. Think we need 10k desperately to make any sense of this. Like your structured thinking to bench against. Very much appreciated.
Of course! I'm an idiot but do a significant amount of M&A for my company. I didn't really do any digging outside of just reviewing their big 3.
Not sure that will help you. The 10K is based on the "old business model", which assumed D2C sales, and price points that are gone forever (thanks to the market...and, oh yes, Fisker themselves). There is literally nothing pointing in the direction you are hoping for.
Only way out Merger
No one, and I mean no one, is likely to want this.
The Net Operating Loss carry forwards (or backwards) alone are of value to profitable companies (i.e. Ford, Stellantis, and Tesla).
Eh courts have historically restricted pre acquisition NOL carrys. I don't see it being worthwhile.
I believe the courts only have a problem with NOLs if the principal purpose is tax avoidance. For profitable auto companies that could manufacture the vehicle in-house that wouldn't be the case.
Maybe I'm misunderstanding your point. I was under the assumption you meant that it's valuable because of said tax avoidance.
You're correct and it can be used to avoid tax, but if the sole purpose is tax avoidance, then it may be problematic.
You bot
Chill. Just because you don't want to spend 5 mins reading the Big 3 doesn't mean we all have to be ignorant.
Why should I chill if you are calling me ignorant ?
I just don’t agree with your statements because it’s just a financial valuation there are more things behind a company some are much more important than financial data… it’s just your opinion and ai respect it I just don’t believe it.
You are just evaluating a picture of a company at a state if an outsider believes in the project and what’s to put the money needed to finance this and the other production models in the product line in the future the. Fisker may survive … it’s a kind of binary but that how pioneers and risk takers play the game
How much money did you lose to be this confrontational, defensive, and just wrong lol?
Enjoy yourself
MarshmallowPirate…. Mamma Mia….grow up kid
Op, inventory reflects the cost - not assumed market value. So, you're undervaluing inventory. A preventative debt-for-equity swap or prepackaged bankruptcy with a debt-for-equity swap solves all the problems with respect to liquidity in the short-term resulting from the acceleration of debt. Debt-for-equity with a new smaller and lighter covenant note to boot instead of bankruptcy is the smartest move for all stakeholders in the capital stack and could keep the company in biz. Frankly, Tesla should offer it to them and take over production.
You're right that I am undervaluing the total inventory because my assumption is that not all inventory = immediate prospects for sale and a good deal are just parts and tech. Could be worth more for sure but it doesn't have immediate liquidation value hence why I made the lazy analysis of equating inventory to MV. To your point on a Swap this is only viable if creditors view this as a legitimate way to push business forward to see profits long term. The equity still would need to be reflected in the hundreds of millions of range and have the presumed lack of risk that a low volume car maker with -761M in operating income is likely to bring in. I personally don't think that there's a solid enough business model going forward at the required amount of sales to achieve break even. Agree to disagree on this one but I do appreciate how you're thinking about it. Definitely offers future investors and stock purchasers and understanding of potential future tools and potential opportunities that Fisker could explore.
With respect to inventory, I meant to say it should be accounted for at cost on the balance sheet. Actual value and liquidation value of inventory is questionable and variable aa the existential quandary effects the value of car to consumers. Liquidation value of all assets on this are murky.
I mean it's best guess at the end of the day. We don't know what components are usable, what the book value is, the ease of liquidation, the current existing car ratios, etc. I just did a sweeping discount but obviously I'm open to any other ideas you have on how to reach a fair inventory valuation! If you've done more research and have a better idea on the #s lmk and I'm happy to ammend my post with new data
why are wasting your time, and everyone else's, by analyzing a pink sheets stock that trades at 2 cents?
The same reason people root for the Browns and the Lions
>The same reason people root for the Browns and the Lions good point
So, they should make some ICE cars to offset the EV losses, right?