Fisker stock alert: Fisker files for bankruptcy under Ch. 11

Fisherman (OTCQB:FSRN) has filed for Chapter 11 bankruptcy in Delaware. The company plans to sell its assets and restructure its debt.

The electric vehicle (EV) company has produced a luxury electric vehicle for a market that is rapidly moving toward cheaper goods.

Fisker shares traded at 2.6 cents per share on June 18, with a market capitalization of less than $22 million, reflecting a 42 percent decline in premarket trading.

End of the street?

Fisker is the second failed auto start-up of Henrik Fisker, a Danish engineer known for developing luxury cars. His first company, Fisker Motors, went bankrupt in 2013. In 2009, the company received a $509 million government loan to build the Karma, a hybrid sports sedan.

The most recent Fisker completed a merger with the special purpose acquisition company (SPAC) Spartan Energy in 2020, raising $1 billion. The money was earmarked for the Ocean, an electric SUV. I compared it to Tuckera fictional car manufacturer that was made into a film starring Jeff Bridges.

By 2021, I was writing that Fisker stock was pure speculation and advising investors not to invest anything they couldn’t afford to lose. At the time, Fisker stock was trading at $14 per share and had a market cap of $4.29 billion.

Marine production began in 2022 through Magna International (NYSE:MGA), a contract manufacturer. At the time, Fisker claimed it had a cheaper model called Pear, which was Foxconn (OTMKTS:HNHPF) in Ohio starting in 2024.

At the end of 2023, Henrik Fisker called reports of problems “exaggerated.” The company plans to sell its remaining 2023 inventory in January. In February, it announced a dealer strategy to sell the cars.

Fisker shares: What’s next?

This seems to be the end for Fisker. To remain competitive in the car business, enormous amounts of capital are required. The focus is now on low-cost vehicles produced in large numbers.

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