The stock price of Faraday Future (NASDAQ: FFIE), trades down almost 30% in the premarket coming off the back of disappointing earnings and withdrawn guidance. The electric vehicle manufacturer, has recently published its annual report, disclosing a revenue of only $0.8 million, which fell short of analyst estimates of $2.59 million.
The low sales figures are represented by the company selling only four of its FF 91 Futurist EVs since production began in March 2023, with six additional vehicles leased. These disappointing sales were attributed to “current inclement market conditions.”
In addition to slow sales, Faraday Future's cash reserves have notably dwindled to $4 million, including $2 million of restricted cash, by the end of last year. This is a stark decrease from the $17 million reported at the end of 2022. Responding to this financial challenge, the company is looking to attract additional investors and considers exploring equipment-backed financing as an alternative to further stock issuance.
Furthermore, the company received a notice from the Nasdaq stock exchange for its late filing of the 10-Q report for the period ending March 31, 2024. This delay could potentially lead to delisting from the Nasdaq exchange if not rectified.
Despite these challenges, Faraday Future stock had previously shown solid gains through 2024, with 95.00% added YTD before this morning's dip.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
Additionally, Faraday Future has a considerable short interest, with 11.99 million shares held short as of May 15, and a short percent of the float at a high 28.27%. This interest from short-sellers, combined with the fervent activity of retail investors on social media platforms, presents a dynamic and precarious position for the stock.
Faraday Future is enduring fundamental obstacles, but when retail support stays with a company, these can be seen as less relevant to pricing for a time. The EV market is not exactly an easy one to build into at the current time, with industry giants such as Tesla and Rivian both finding their share prices trimmed heavily through the year so far. Whilst it is difficult to say with certainty how this one plays out, it is unlikely to be clear roads ahead for a little while.
