On Friday, American electric-vehicle startup Fisker Inc (FSR.N) raised $150 million from an existing institutional investor through the issue of convertible bonds with an additional $550 million in funding available, the company said. The EV maker expects to use the proceeds to ramp up deliveries of its new vehicles. The company reiterated its plan to increase deliveries of its flagship Ocean sports utility vehicle to 300 units per day later this year, following the successful production launch in 2022.
Fisker said that the convertible debt offering consists of 0% senior unsecured notes due 2025, with an original issue discount of 12%. The new money will go towards funding general corporate purposes, sales and marketing initiatives, capital expenditures, and the development of future products.
Founded in 2016 by Henrik Fisker, the renowned automotive designer behind iconic cars such as the BMW Z8 and Aston Martin DB9, Fisker is committed to transforming the automotive industry through its commitment to sustainable design and innovative vehicles. Its current lineup includes the luxury and sustainable Fisker Ocean SUV, the high-performance and affordable Fisker Ronin, and the agile CityEV commuter car.
The company’s upcoming product plans include a pickup truck, the Fisker Alaska, and an offroad package for the Ocean SUV, the Force-E offroad vehicle. The EV maker’s strategy targets environmentally conscious consumers who value sustainability, performance, and style. It has started to deliver its first vehicle, the Ocean, in the US and Europe this year. The EV company has not profited, although its net losses narrowed from Q1 to Q2.
In the near term, Fisker’s prospects will depend on its ability to generate strong demand for its new vehicles and scale up production capacity. The company will also need to successfully introduce new designs, expand its footprint in China, and overcome challenges such as the potential impact of changing government regulations and incentives on the demand for electric vehicles.
Fisker stock is up about 2.9% in early trading Friday morning. The company’s shares are trading at a premium revenue valuation and price/book multiple. The shares have a long-term technical rank of 51. For more insights and research, subscribe to InvestingPro’s premium services here.
Disclosure: The author has a position in FSR. Additional disclosures may be found in our full disclaimer.
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