Fisker (OTCMKTS:FSRNQ) is a company investors may notice has a “Q” at the end of its ticker symbol. This means it is a company that has already declared bankruptcy. And since it is trading at less than 2 cents per share, it is one that most will not want to touch. However, investors in Fisker stock certainly have more headwinds to worry about today, with news of a sweeping recall the latest fly in the ointment for investors considering taking a stab at this speculative penny stock.
According to a press release put forward by the company, a voluntary recall has been issued for 2023 and 2024 Ocean SUV model years. This recall involves the outer door handles on these models, with more than 8,200 such vehicles sold in the U.S., more than 500 in Canada and more than 3,800 in Europe. It’s expected that roughly 2.5% of all Ocean SUVs sold could have these defects.
Given the company’s current state and these newfound issues, it may be surprising to some to see Fisker stock higher on the day, but that’s how penny stocks trade. Let’s dive into this latest headwind for the company and see what we can make about Fisker’s prospects moving forward.
Fisker Stock: Latest Headwind Causing Erratic Trading
It’s worth pointing out that Fisker’s total production to date hasn’t been impressive, which is partly a good thing when it comes to recalls of this scale. But this recall does highlight the company’s production-related issues, which have hampered the stock in the past and are a key reason the company has been forced into restructuring recently.
Fisker stock has been trading erratically all afternoon. It has swung wildly from the red to the green and is currently up about 2%. Blink, and that might change back to red, however.
With the company’s market capitalization at less than $25 million, it’s clear some speculators may be willing to buy some shares as a call option on the brand surviving in some form or its assets potentially getting bought by some larger automaker. But without resolving the company’s debt situation, Fisker does look to be a total loss for those who put capital into this automaker in the past.
From Filled With Potential to Bankrupt
Years ago, I thought Fisker’s Ocean SUV looked somewhat attractive and had a very appealing price point. But with prices coming down in this space, heightened competition, and no realistic path to profitability, this is a stock with simply too many problems right now.
Those looking to bet on a turnaround in the EV sector have far too many better options to choose from right now than Fisker.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
