Shares of electric vehicle (EV) maker Fisker (FSR 8.03%) tanked last week after the company released its third-quarter financial and operational report. The stock is down 36% since last week’s report.
But the EV start-up provided another update on Friday, and investors are now buying the dip. Shares popped as much as 11% this morning, and remained higher by 6.7% as of 10:35 a.m. ET.
Deliveries quickly accelerating
Investors crushed the stock after the company said it only delivered about 1,100 vehicles in the third quarter even after it produced 4,725 EVs. The company noted in the release that deliveries accelerated in October, but that didn’t stem the flow out of the stock.
On Friday, Fisker said it had “changed its distribution strategy to rapidly increase global sales and deliveries.” That has led to a record day for deliveries of its Ocean electric SUV. The 107 vehicles delivered last Thursday represented about 10% of what it shipped in the entire third quarter in just a single day. Fisker said its new strategy includes staffing its own delivery locations with Fisker employees. It also has added transportation logistics partners to more quickly deliver customers’ vehicles.
The improvement on deliveries will make a big difference in revenue, but it really is just an incremental — though important — improvement for the overall business. The record day of deliveries last week generated more than $7.5 million in revenue for Fisker. For perspective, compare that single day to the nearly $72 million it generated for the entire third quarter.
But Fisker still has a long way to go to achieve profitability. It is counting on a growing slate of vehicle offerings, including an affordable car meant for urban life and a pickup truck due to launch in the next few years.
While investors are noting the progress reported on Friday, the stock likely won’t have a meaningful catalyst to recover its recent losses until the company shows it can sustain a growing production and delivery rate.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.