According to media reports, on June 16th, electric vehicle startup Faraday Future Intelligent Electric (FF) announced its plans for a reverse stock split to meet the Nasdaq's requirement for a minimum trading price of the company's stock. The proposed ratio for the reverse stock split by Faraday Future ranges from 1:2 to 1:90 of outstanding common shares, with the final ratio to be determined by the board of directors after shareholder approval.
Nasdaq requires companies to have a stock trading price higher than $1, and a warning letter is issued if the stock price remains below $1 for 30 consecutive business days. The company then has 180 days to regain compliance with Nasdaq's regulations, during which the stock price must be above $1 for at least 10 consecutive days to meet the requirement. However, if the company meets other criteria, it may be granted a second 180-day extension.
In January of this year, Faraday Future received a warning letter from Nasdaq stating that it did not meet the continued listing requirements. In May, Faraday Future obtained an additional 180-day extension from Nasdaq to meet the minimum trading price requirement.
This year, electric truck manufacturer Nikola has also expressed the possibility of conducting a reverse stock split, and Lordstown Motors has announced its plans for a reverse stock split to comply with Nasdaq's listing requirements.
On June 16th, Faraday Future also announced a delay in the second-phase delivery timeline of its FF 91 2.0 Futurist Alliance from the end of the second quarter of 2023 to August 2023. On June 16th, Faraday Future's stock price closed at $0.45.
Faraday Future stated that in order to accelerate the production capacity ramp-up of the FF 91 2.0, the company plans to raise $300 million in financing. Currently, Faraday Future has submitted an S-3 filing to the U.S. Securities and Exchange Commission. Once the S-3 becomes effective, the company will be able to issue up to $300 million of Class A common stock and warrants.
Faraday Future believes that if the $300 million financing plan is successful, it will solve the production capacity issues faced by FF and bring the company's stock price to the market, enabling the smooth delivery of more FF 91 2.0 Futurist Alliance vehicles and allowing more cutting-edge users to enjoy the future of "intelligent technology luxury" in their travel.
