Struggling California EV maker Faraday Future (FF) has announced a second reverse stock split as part of a so-called "master plan" to keep the business afloat.
The company will reduce its number of issued and outstanding shares by three times, in theory boosting the price of each share and protecting the company from risk of delisting due to its 'penny stock' status.
Shares of the company are currently trading at under $0.01, having been valued at $41 just a year ago, and having fallen from over $1,400 per share after its 2021 IPO.
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In a letter to shareholders, CEO Matthias Aydt gave an update on the company's “master plan to achieve sustainability and further stability", which it first announced in October.
FF has sold only a handful of its luxury E-SUVs, and has centred its marketing strategy around partnering with celebrities to build brand awareness. But with sales of the over $300,000 EVs not taking off, the company's cash situation has struggled.
However, Aydt says that FF is continuing to make progress on future funding and expects to close an additional round of capital financing from strategic and financial investors.
The firm is also reducing its monthly cash burn by cutting back on unnecessary spending.
"We are prioritizing cash flow breakeven over volume to avoid scaling production too quickly, which has been an issue for many competitors. As such, we believe we will be cash flow breakeven at a lower vehicle production/delivery figure than that of our competitors," the firm says in a statement.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
