Looking Towards Fisker’s Q4 2023 Results

@seancallahan Great analysis and spot on. I vote Sean for "Chief Customer Officer" at Fisker Inc.

We all have a vested interest in seeing @FiskerInc be successful, and after listening to yesterday's call, they clearly need help to see the picture from the outside in and stop drinking the cool-aid. 

I am hoping for a change. Real soon.

Well written article, hoping Fisker can indeed overcome the challenges and bounce back. As a shareholder, Q3-2023 results and the effect on the share price has been disappointing. With so many reservations and production system in place, one would think it should be straightforward to focus on producing and delivering the vehicles as fast as possible.

Sean, your own business depends on the existence of Fisker Inc. When Fisker Inc dies, then fiskerati.com is dead too. So you're trying hard to give a positive outlook. Yes you're right, Fisker is not at the "definitive endpoint" yet, but the current situation is definitely not just a "cautionary signal". We were at that point a half year ago, when homologation was delayed, when production targets were cut, and so on.  That were cautionary signals. Now it's worse. Much worse.

I would like to pick up on your half-time analogy: If you are 4-0 down at half-time in a soccer match, the chances of a comeback are extremely slim. The chances of a comeback would increase considerably if you can take the players off the pitch at half-time who failed so badly in the first half and substitute them with world-class players instead. You won't write this for obvious reasons, but it's clear to everyone: Henrik and Geeta Fisker are not capable to lead the company into a bright future. They have so far failed in all areas: supply chain, communications, deliveries, services, software, finances. Henrik Fisker is a great car designer, but as CEO and COO/CFO Henrik and Geeta Fisker are just amateurs without the needed knowledge and experience.

If you want to deliver 5000 cars to the doorsteps of the new owners, then you have to organize the capacity to deliver 5000 cars to the doorsteps of the new owners in good time. If you want to feed 5000 people with preordered hotdogs, then you can't begin ordering buns and sausages when there are already 3000 people in a queue in front of your stall. But that's what Fisker does, even though they've known for more than a year that they have to deliver 5000 cars a month.

What we see is not bad luck. It's structural failure at Fisker, because of an incapable top management. Without a change at the top of the company, Fisker will hit the wall in the second half of 2024. When everybody thinks, that you are a waffler, a serial liar, then business will be impossible. That's where Fisker is with the current management. Fisker badly needs new faces in top management to regain trust.

So in my view: If there is no change in top management, then the chances of a turnaround, of a surprisingly successful second half are less than 1 percent.

Posted by: @sportynick

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Well written article

Yeah, chatGPT does that. I liked the article better when they were written by Sean. Shorter, more to the point and less gpt'y language. But tastes differ. 

No one knows what we will see when they eventually file their quarterly reports. No clarity still on timing for 3Q financials other than noting "In the course of completing the preparation of the Report, the Company determined that it has material weaknesses in the Company’s internal control over financial reporting. These material weaknesses will be discussed in the Report." They have indicated that this may affect previous quarters and that current quarter statements are delayed an unknown period past the filing deadline.  

https://www.sec.gov/Archives/edgar/data/1720990/000172099023000118/fsrnt10-qform12bx25req32023.htm

https://www.msn.com/en-us/money/companies/fisker-shares-sink-18-after-ev-maker-discloses-material-weaknesses-in-financial-reporting/ar-AA1jUE1k

Posted by: @bayoubob

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They have indicated that this may affect previous quarters

What? Previous as well? This will be interesting. Public traded companies are seldom allowed to do particularly much change without risking penalites are they? 

Is this why all these law firms have launched investigations? 

@dsf yesterday's market reaction was about more than just the production miss and financial misses. This filing got dropped late on Monday. As it says in the 12b-25 filing: "Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof? Yes ☒ No ☐"

Posted by: @bayoubob

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"results of operations from the corresponding period for the last fiscal year"

 

Presumably that would be Q3 2022.  In thinking about it, there was no appreciable revenue to materially misstate at that time.  So, the issue could only be on the expense side of operations.  My first gut instinct is that it would have something to do with non-cash expenses related to stock-based compensation, in particular any awards related to hitting milestones like "SOP" (although that was Q4 2022).

From Motley Fool - Still has turnaround potential but better be profitable and get more cash in three quarters:

The Q3 earning call couldn't have been worse. The numbers presented were catastrophic and the admitted logistical errors were the result of a lack of experience.

Fisker management knows the mistakes made and will hopefully take actions that will bring about a rapid and significant improvement in the logistical processes.

In order not to let the share price plummet, results must be presented in the short term. Waiting idly until Q4 numbers are available would be negligent.
 For example, the number of vehicles delivered to customers should be reported monthly. On the one hand, this would increase the pressure on the Fisker organization and, on the other hand, it would build confidence for shareholders, provided the figures develop accordingly. Without rapid confidence-building measures, Fisker will have no future.
I hope Mr. Fisker reads the forum

@rolf Although I really want them to be successful you just restated the very same concern I voiced last year when they only committed to buying enough parts for 300 vehicles.  I got criticized that the only way to assure parts quality was to order low batches.  I of course pointed out that 300 was never enough to assure long term compliance and that ordering enough for 5000 committed Ones would assure the suppliers knew Fisker was serious and give Fisker significant leverage to make vendors replace/correct defective parts.  That conversation was shut down. To be sure a production line only works when there are parts to feed it.  You make that supply steady AND improve quality by keeping your suppliers operations constant with a volume of repetitive manufacturing.

@bayoubob down another 15% today. Do you think this is still earnings related? 

@mag48 market cap at $964 million at the close today. The market is losing confidence in the company and management. It needs to raise a significant tranche of capital. The restated financial reports cannot arrive quickly enough. They must clear the clouds hanging over them and they have to show that Ocean still has viable demand in the market. Looking very wobbly.

https://www.thestreet.com/electric-vehicles/struggles-continue-for-teslas-biggest-electric-vehicle-competitors?puc=yahoo&cm_ven=YAHOO

Fisker, which delayed its results from Nov. 8, said the material weakness was related to complex accounting in multiple countries, involving convertible notes, derivatives as well as raw material and finished goods inventory in the contract manufacturing of its vehicles.