Faraday Future Intelligent Electric (NASDAQ:FFIE) stock plummeted in today's early dealing, adding to Tuesday’s decline, as the EV firm announced a share sale to raise $90 million.
The company, in a statement, told investors it has agreed to sell stock (Class A common shares) to investors in an ‘at the market’ equity offering.
Proceeds from the share sales are earmarked for investment in product and technology development, establishment of global sales and service networks, ramp-up of production.
It added that the funds may also be used for working capital and corporate purposes, repayment or repurchase of outstanding debt, capital expenditures, potential joint ventures, acquisitions and other business opportunities and purposes.
The fund raise is being run by brokers Stifel and B. Riley Securities, along with Wedbush Securities and Maxim Group.
In terms of pricing, the company noted that the agreement is ‘at-the-market’.
“Sales of Shares, if any, will be made at or related to then prevailing market prices and, as a result, prices may vary,” Faraday said. “The volume and timing of sales under the ATM program will be determined at the company’s discretion.”
Faraday’s market price substantially discounted following the announcement.
In New York, the shares were down 70 cents or 28.46% in premarket dealing changing hands at $1.74
That’s after the EV stock fell 17% on Tuesday to mark a closing price of $2.46.
Faraday Future is described as a ‘start-up technology technology company focused on the development of electric vehicles’.
Or in its own words, “a California-based global shared intelligent mobility ecosystem company founded in 2014 with a vision to disrupt the automotive industry.”
The company is developing a suite of AI integrated electric vehicles which it brands as ‘hypercars’.
Last week, Faraday Future appointed Matthias Aydt as its new global chief executive, effective Friday 29 September, taking the reins from Xuefeng Chen who is returns to a prior position as the company’s China CEO, focusing on the launch of the company’s EVs in China.
Aydt has been with the company for seven years and was most recently head of product execution, and, previously was ‘head of product definition & mobility ecosystems and business development’.
“FF is currently focusing on ramping up FF91 production and beginning to generate revenue, improvement of product and technology capabilities and the development of next-generation products including AI developments,” Aydt said in a statement.
“I’m very excited for the new Global CEO role, and I’m confident that it will allow me to highlight my experience in product technology, research, and development for luxury car brands at global, world-class car companies and will provide tremendous value and leadership to FF.”
Faraday Future stock is down nearly 90% in 2023 to date, with the majority of the stock decline coming in the past month.
In early September, the company claimed it was the subject of "suspicious activities" that it believed indicates a coordinated effort to undermine its valuation and said it planned on legal action if any illegal short selling or market manipulation is found.