Faraday Future issued a series of announcements on Tuesday about its financial situation and delivery plans, which caused panic in the market and caused its stock price to plummet.
According to the announcement, Faraday Future will postpone the first deliveries of its high-performance electric vehicle FF 91, originally scheduled for the end of this month, to August. The company said this was due to supplier delays and the need for additional testing. After completing the first deliveries, the company will gradually ship to all pre-orders.
In addition, Faraday Future has proposed a reverse stock split with the aim of maintaining its listing on the Nasdaq stock exchange. The plan needs to be approved by Faraday Future shareholders, and then the board of directors will decide on the ratio of the reverse split, which ranges from 1 for 2 to 1 for 90.
Faraday Future also said it may issue more common stock to raise as much as $300 million.
The news has investors worried about Faraday Future’s future. Shares of Faraday Future have fallen nearly 90% in the past year, well below the $1 per share minimum set by the Nasdaq exchange. During this period, the company has been facing the problem of insufficient funds needed to start the production of the car. In February, the company raised $135 million in a convertible secured note offering, but that clearly wasn’t enough.
On Tuesday, Faraday Future fell more than 40% before the U.S. stock market. As of press time, the decline was still 37.56%.
