Fisker stock alarm: Insolvency administrator Fisker recalls over 12,000 electric vehicles

Fisherman (OTCQB:FSRNQ) is a company that investors may notice with a “Q” at the end of its ticker symbol. That means it’s a company that’s already filed for bankruptcy. And since it’s trading at less than 2 cents a share, it’s one that most don’t want to touch. Investors in Fisker stock certainly have even more headwinds to worry about today, though, as news of a full-scale recall is the latest downer for investors considering dabbling in this speculative penny stock.

According to a press release from the company, a voluntary recall has been issued for the 2023 and 2024 Ocean SUV model years. This recall affects the exterior door handles of these models. More than 8,200 such vehicles have been sold in the United States, more than 500 in Canada and more than 3,800 in Europe. It is expected that approximately 2.5% of all Ocean SUVs sold could have these defects.

Given the company’s current state and these newly emerged issues, it may be surprising to some that Fisker stock moved higher on the day, but such is penny stock trading. Let’s take a closer look at this recent headwind for the company and see what we can say about Fisker’s future prospects.

Fisker shares: Recent headwinds cause erratic trading

It’s worth noting that Fisker’s overall production hasn’t been impressive so far, which is partly a good thing when it comes to recalls of this magnitude. But this recall sheds light on the company’s production-related issues, which have weighed on its stock price in the past and are a major reason the company was recently forced to restructure.

Fisker stock has been trading volatile all afternoon, swinging wildly between red and green and currently up about 2%. However, a quick blink could see the stock flip back to red.

Since the company’s market capitalization is less than $25 million, it’s clear that some speculators might be willing to buy some shares as a call option if the brand survives in some form or its assets are potentially bought by a larger automaker. But without resolving the company’s debt situation, Fisker seems to be a total loss for those who have invested capital in this automaker in the past.

From full potential to bankruptcy

Years ago, I found Fisker’s Ocean SUV somewhat attractive and very attractively priced. But with prices in the space falling, competition increasing, and no realistic possibility of becoming profitable, this stock is currently beset with too many problems.

If you want to bet on a turnaround in the electric vehicle sector, you currently have a much better choice than Fisker.

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Read more:Penny Stocks – How to profit without being cheated

As of the publication date, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.