Case Summary

Fisker

NYSE: FSR

Case Details

  • Zahabi v. Fisker Inc. et al.
  • Class Period:August 4, 2023 - November 20, 2023
  • Date Filed:November 27, 2023
  • Jurisdiction:U.S. District Court, Central District of California
  • Docket Number: 2:23-cv-09976
  • Lead Plaintiff Deadline: January 26, 2024
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Overview

A class action lawsuit has been filed against Fisker Inc., (“Fisker” or the “Company”) (NYSE: FSR) and certain of the Company’s top executive officers alleging that they violated the federal securities laws. The lawsuit seeks to represent all persons and entities who purchased or otherwise acquired Fisker securities between August 4, 2023, and November 20, 2023, inclusive (the “Class Period”).

Fisker is an electric vehicle company based in California. The Company went public in October 2020 via reverse merger with a special purpose acquisition company called Spartan Energy Acquisition Corp. The Company has one model currently launched, the Fisker Ocean (the “Ocean”), an electric vehicle which was released in the United States in June 2023.  

As alleged in the lawsuit, on November 8, 2023, before the market opened, Fisker announced that the completion of the Company’s financial statements would be delayed due to the appointment of a new chief accounting officer (“CAO”) and the departure of the Company’s former CAO. The Company had previously announced former CAO, John Finnucan (“Finnucan”) provided notice of intent to resign on September 19, 2023, effective October 27, 2023. Fisker’s new CAO, Florus Beuting (“Beuting”), was hired effective as of November 6, 2023. The Company advised it “expects to file its Form 10-Q by November 14, 2023.” On this news, the Company’s share price fell $0.38, or 8.7%, to close at $3.99 per-share on November 8, 2023, on unusually heavy trading volume.

Then, on November 13, 2023, after the market closed, Fisker announced its third quarter 2023 financial results, reporting a loss of $91.0 million and $0.27 loss per share. The Company also reported $78.02 million in selling, general and administrative operating costs, and expenses, as well as $9.42 million for research and development, totaling $87.44 million for total operating costs and expenses for the three months ended September 30, 2023. The Company also cut its production forecast for the year and disclosed that, though 4,725 Oceans were built in the third quarter, only 1,097 were delivered to customers. The Company also announced it would be unable to timely file the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. The Company disclosed, in preparing its results, it had determined “it has material weaknesses” in “internal control over financial reporting.” On that same day, the Company held an earnings call wherein Defendants disclosed that the delay in reporting was due to having a “highly complex quarter” including “very complex accounting along with convertible notes and accounting for derivative” and “things like raw material inventory accounting and finished goods inventory accounting.” The Company also disclosed that “delivery and the service infrastructure” was limiting deliveries and, as a result, the Company was “in the process of dramatically overhauling our service and delivery infrastructure.” On this news, the Company’s share price fell $0.77, or 18.7%, to close at $3.34 per share on November 14, 2023, on unusually heavy trading volume.

On November 20, 2023, after the market closed, the Company disclosed that Beuting (the CAO hired November 6, 2023) had provided notice of his intent to resign from the Company on November 14, 2023, effective immediately. On this news, the Company’s share price fell $0.35, or 15%, to close at $2.00 per-share on November 21, 2023, on unusually heavy trading volume. Finally, on November 22, 2023, the Company filed its Form 10-Q quarterly report for the period ended September 30, 2023, which disclosed that the Company had “identified approximately $20 million of expenses” which were “incorrectly recorded primarily as selling, general and administrative expenses in our preliminary earnings results, but were later determined to be associated with production set-up activities” and that “other inventory adjustments were recorded resulting in a $4.0 million increase in net loss subsequent to the preliminary earnings results.”

The lawsuit filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Fisker had a material weakness in its internal control over financial reporting; (2) that Fisker had incorrectly accounted for certain costs; (3) that as a result the Company was likely to delay filing its quarterly report; (4) that Fisker’s infrastructure was limiting its ability to deliver its production; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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If you purchased or otherwise acquired Fisker securities between August 4, 2023, and November 20, 2023, inclusive, and suffered substantial losses, and you wish to serve as lead plaintiff in this lawsuit, we encourage you to submit your information to DiCello Levitt LLP via the form on this page. 

You can also contact DiCello Levitt partner Brian O’Mara by calling (888) 287-9005 or at investors@dicellolevitt.com. 

The deadline to apply to the Court to serve as a lead plaintiff in the Fisker lawsuit is January 26, 2024.

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