Can I Buy Fisker Stock? A Deep Dive into the Current Situation

The short answer is no, you cannot currently buy Fisker stock on public exchanges. Fisker Inc. (FSR) was delisted from the New York Stock Exchange (NYSE) in March 2024. This followed a period of financial struggles and a failure to meet the NYSE’s continued listing standards. While the name Fisker lives on, purchasing its shares through traditional avenues is no longer possible.

Understanding the Delisting and What it Means

The delisting of a stock from a major exchange like the NYSE is a serious event. It signifies that the company has fallen short of the exchange’s requirements, which usually involve factors like minimum share price, market capitalization, and financial health. In Fisker’s case, persistent financial difficulties, including concerns about its ability to continue as a “going concern,” triggered the delisting.

When a company is delisted, its shares typically move to the over-the-counter (OTC) market. The OTC market is a decentralized, less regulated trading environment. While trading might still be possible, it comes with significantly higher risks. Transparency is often reduced, bid-ask spreads can be wider (meaning you pay more to buy and receive less when you sell), and the potential for manipulation is greater.

Fisker’s Bankruptcy Filing

To further complicate matters, Fisker Inc. filed for Chapter 11 bankruptcy protection in June 2024. Bankruptcy proceedings dramatically alter the landscape for shareholders. Chapter 11 allows a company to reorganize its finances and operations while being shielded from creditors’ lawsuits. However, existing shareholders are often the last in line to receive any compensation.

In many cases, during or after a bankruptcy reorganization, the value of existing shares can be significantly diluted or even wiped out entirely. This is because the company may issue new shares to raise capital, diluting the ownership stake of existing shareholders. Creditors may also receive equity in the reorganized company in exchange for forgiving debt, further reducing the value of previous shares.

Therefore, even if you were able to find Fisker stock trading on the OTC market (which may not be the case depending on the specific circumstances of the bankruptcy proceedings), it would be an extremely speculative investment with a high risk of complete loss.

The Future of Fisker: A Waiting Game

The bankruptcy process is complex and can take a significant amount of time. The future of Fisker is highly uncertain. The company could be restructured and emerge from bankruptcy, potentially with a new business model and a different ownership structure. It could also be acquired by another company or liquidated, where its assets are sold off to pay creditors.

During this period, the company’s stock, even if it were available for trading, would likely be driven by speculation and news surrounding the bankruptcy proceedings. It is essential to approach such investments with extreme caution and understand the potential for substantial losses.

FAQs About Buying Fisker Stock

Here are some frequently asked questions to provide further clarification on the situation with Fisker stock and related considerations:

1. Is Fisker stock still trading anywhere?

It’s possible that Fisker stock might be trading on the OTC market under a different ticker symbol. However, confirming this and finding a broker that facilitates such trades would require research. Keep in mind the risks associated with OTC trading, as previously mentioned. It’s crucial to perform thorough due diligence before considering any investment.

2. What happened to my Fisker stock if I owned it before the delisting?

If you owned Fisker stock before the delisting, you still technically own the shares. However, their value is likely significantly diminished, and their future value is highly uncertain. You’ll need to monitor the bankruptcy proceedings to understand what, if any, recovery you might receive. Your brokerage should provide information about the delisting and bankruptcy, but it is recommended to consult with a financial advisor for personalized guidance.

3. Will Fisker stock ever be listed on a major exchange again?

It’s impossible to say definitively. If Fisker successfully reorganizes and meets the listing requirements of a major exchange in the future, it’s possible. However, this is a long and uncertain process. Listing requirements include factors like financial stability, market capitalization, and corporate governance standards. Re-listing is a significant challenge for any company emerging from bankruptcy.

4. Should I buy Fisker stock now that it’s “cheap”?

No, it is generally not advisable to buy Fisker stock at this point. The potential for further losses is extremely high due to the bankruptcy proceedings. The stock’s price might appear low, but that reflects the enormous risk associated with the company’s financial situation. This is more akin to gambling than investing.

5. How does Fisker’s bankruptcy affect its shareholders?

In bankruptcy, shareholders are typically the last to be paid. The company’s assets are first used to pay secured creditors (e.g., banks with loans secured by assets), then unsecured creditors (e.g., suppliers), and finally, if anything is left over, shareholders. In many cases, shareholders receive little to no recovery in bankruptcy.

6. What are the risks of trading OTC stocks like Fisker (potentially)?

OTC stocks carry several risks, including:

• Lower liquidity: It can be difficult to find buyers or sellers, leading to wider bid-ask spreads and making it harder to execute trades at desired prices.
• Less transparency: OTC markets have less regulatory oversight than major exchanges, resulting in less information available about the company.
• Higher volatility: OTC stocks tend to be more volatile than those listed on major exchanges, leading to larger price swings.
• Potential for fraud and manipulation: The lack of regulation makes OTC markets more susceptible to fraudulent schemes and market manipulation.

7. What alternatives are there to investing in Fisker?

There are many alternative investments in the electric vehicle (EV) sector that are publicly traded and have stronger financial positions. Consider researching established EV manufacturers, battery technology companies, or suppliers to the EV industry. Consulting with a financial advisor can help you identify suitable investments based on your risk tolerance and investment goals.

8. Where can I find information about Fisker’s bankruptcy proceedings?

Information about Fisker’s bankruptcy proceedings can typically be found on the court’s website or through legal news services specializing in bankruptcy cases. You can also find some information on Fisker’s investor relations website (although the information may be limited). However, it’s essential to consult official sources and legal professionals for accurate and up-to-date information.

9. What is “going concern” and why is it important?

“Going concern” refers to a company’s ability to continue operating in the foreseeable future. Auditors assess whether a company is a going concern based on its financial health, liquidity, and other factors. If there’s substantial doubt about a company’s ability to continue as a going concern, it’s a significant warning sign for investors. It was a critical element in the concerns surrounding Fisker’s viability.

10. Should I consult with a financial advisor about my Fisker stock holdings?

Yes, it is highly recommended to consult with a qualified financial advisor about your Fisker stock holdings. A financial advisor can assess your individual circumstances, provide personalized advice, and help you make informed decisions about your investment portfolio. They can also assist you in understanding the implications of the bankruptcy proceedings and exploring alternative investment strategies.

11. Is it possible for Fisker to be acquired by another company?

Yes, it is possible for Fisker to be acquired by another company during the bankruptcy process. An acquisition could provide Fisker with the financial resources and expertise needed to restructure and continue operating. However, the terms of any acquisition would likely impact existing shareholders, potentially diluting their ownership or reducing the value of their shares.

12. What lessons can be learned from the Fisker situation?

The Fisker situation highlights the importance of:

• Thorough due diligence: Before investing in any company, it’s crucial to conduct thorough research and understand its financial health, competitive landscape, and management team.
• Diversification: Diversifying your investment portfolio can help mitigate the risk of losses from any single investment.
• Risk management: Understanding your risk tolerance and investing accordingly is essential. Avoid investing in speculative ventures that you cannot afford to lose.
• Staying informed: Keeping abreast of company news, industry trends, and economic developments can help you make informed investment decisions.
• Seeking professional advice: Consulting with a financial advisor can provide valuable guidance and help you navigate complex investment situations.

In conclusion, while the allure of potential gains in a struggling company may be tempting, the current state of Fisker and its bankruptcy proceedings make buying its stock an extremely risky proposition. Proceed with extreme caution and only after thoroughly understanding the potential consequences.