Faraday Future files appeal
A letter from The Nasdaq Stock Market LLC (“Nasdaq”) dated April 24, 2024, indicated that electric car maker Faraday Future with its US manufacturing plant in Hanford California, was not in compliance with Nasdaq Listing Rule 5810, as the company’s securities had a closing bid price of $0.10 or less for ten consecutive trading days. As a result, the Nasdaq staff has determined to delist the Company’s securities from The Nasdaq Capital Market (the “Delisting Determination”).
Faraday Future stated that it intended to request a hearing to appeal the delisting ruling before May 1, 2024, the last allowed date. That has now happened, say sources, so during a 15 day period, the company’s securities continue to be listed on the NASDAQ Capital Market – what amounts to a temporary reprieve until there is a hearing.
No company representative was available to clarify the delisting, nor will NASDAQ comment says a spokesperson.
If the company failed to appeal the delisting decision before May 1, 2024, trading would have been suspended at the opening of the market on May 3, 2024, and a 25-NSE form will be submitted to the U.S. Securities and Exchange Commission. This form would cancel Faraday Future’s listing and registration qualifications on the NASDAQ Stock Market.
But the stock is still trading as of the close of business May 3.
Additionally, on April 18, 2024, Nasdaq notified the company that since it had not yet filed its Form 10-K for the year ended December 31, 2023, it no longer complied with Listing Rule 5250(c)(1). Pursuant to Listing Rule 5810(c)(2)(A), this deficiency is now an additional basis for delisting.
The delisting would make it harder for the startup company to raise more capital to keep it in business with its 10 year anniversary this month. The company in the past year has announced that it intended to design the Hanford manufacturing plant to put out 10,000 vehicles per year, but according to Faraday Future data, the company has delivered only 11 vehicles in the past decade.The EV sells for about $300,000.
The company’s stock price has been going down for the past several years and has lost 94% of its value in just the past year. This week as of May 3 it is valued at $0.04 per share with a total market value of $1.78 million. Recent analysis has shown that the high-end electric car maker has lost $3.8 billion since it was founded. Last November Faraday told investors that “The Company expects to continue to generate significant operating losses for the foreseeable future.”
NASDAQ rules look to protect investors. If a stock has experienced a steep price decline and is trading below $1, it is considered very risky.It is hard to imagine a hearing on appeal would not find this to be the case with the EV maker’s stock value of 4 cents.
FF91 outside Hanford plant