Investors Face Another Management Change at Fisker
Fisker undergoes management change, impacting investors; stock performance declines. Late filing of financial statements prompts stock exchange notice. Analyst rating under review following management changes.
Troy D. Hanson
November 21, 2023
Electric-vehicle start-up Fisker is undergoing yet another management change, adding to the challenges faced by investors. Chief Accounting Officer Florus Beuting has resigned, with his departure effective from November 14. This news comes on the heels of Fisker reporting weaker-than-expected third-quarter sales and revising its production outlook.
In premarket trading on Tuesday, Fisker stock declined by 0.4%. Additionally, S&P 500 and Nasdaq Composite futures were both down approximately 0.2%.
The delay in the release of the third-quarter report can be attributed, in part, to a change in chief accounting officers. Prior to Beuting assuming his role on November 6, John Finnucan departed on October 27. During an earnings conference call on November 13, Chief Financial Officer Geeta Gupta-Fisker addressed questions regarding the company's accounting practices. She explained that the complexities of the third quarter, being the first quarter of significant sales, presented challenges related to foreign exchange, derivatives, and accounting for contract manufacturing.
It is worth noting that Fisker does not possess its own manufacturing plant. The Fisker Ocean, the electric vehicle currently being sold by the company, is built by Magna International. This reliance on an external partner introduces certain growing pains that Fisker is actively working to address.
Fisker remains tight-lipped regarding the specific reasons for the recent change in management and the potential candidates to fill the role. However, the company reaffirms its commitment to addressing the various challenges it faces. As a part of this effort, Fisker aims to improve systems, expand its workforce, and attract new talent.
Late Filing of Quarterly Financial Statements Prompts Stock Exchange Notice
Fisker, the company in question, has yet to file its quarterly financial statements with the Securities and Exchange Commission (SEC). A notification was sent on November 13th, informing the SEC of the delay in filing.
As a consequence, the New York Stock Exchange (NYSE) promptly issued a notice to Fisker in regards to this late filing. This occurrence is not unexpected, as companies are obligated to have up-to-date filings with the SEC in order to be listed on most major exchanges. Fisker now has a grace period of six months to catch up on their filings.
Analyst Rating Under Review Following Management Changes
The recent changes in management have brought about a reevaluation of Fisker's stock by BofA Securities analyst, John Murphy. As a result, Murphy has put his previous "Buy" rating under review, along with the target price of $6.50 per share.
Analysts' Opinions and Market Performance
Currently, 31% of analysts covering Fisker stock rate it as a Buy. It is important to note that this rating falls below the average Buy-rating ratio of stocks in the S&P 500, which stands at roughly 55%. On average, analysts have set a price target of around $5.50 per share. Prior to the release of the third-quarter results, 42% of analysts rated the stock as a Buy, with an average price target of about $8 per share.
In response to recent management changes and a weak quarterly report, investors have shown their disapproval by selling off Fisker shares. Prior to the delayed quarterly report and the change in accounting officer, shares were valued at $4.37 each. However, as of Monday's closing, they had dropped significantly to $2.35 per share.
As trading commenced on Tuesday, Fisker stock had witnessed a decline of approximately 56% over the past month. In contrast, the S&P and Nasdaq indexes experienced gains of about 8% and 10% respectively during the same period.