Investors have filed a class action lawsuit against electric car maker Fisker, saying the company has misled investors and the public about the company's actual financial performance.
"On Nov. 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 and the departure of the Company’s former CAO," says the lawsuit, filed in U.S. District Court for the Central District of California.
After the announcement, the company’s share price fell $0.38, or 8.7%, the suit said.
On Nov. 13, Fisker reported a loss of $91.0 million and $0.27 loss per share and cut its production projections for the year, the lawsuit said. The stock dropped another $0.77, or 18.7 percent according to the lawsuit.
The bad news and the stock drops continued in November, the suit says.
The company has earlier made "positive statements about the Company’s business, operations, and prospects," according to the lawsuit.
"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," the lawsuit states.
The company failed to tell investors that it had a "material weakness in its internal control over financial reporting; that it had incorrectly accounted for certain cost and that as a result the Company was likely to delay filing its quarterly report," according to the suit.
The lawsuit seeks damages and attorney fees.
The plaintiffs are represented by attorneys Robert V. Prongay, Charles Linehan and Pavithra Rajesh, of Glancy, Prongay & Murray LLP, of Los Angeles.
Zahibi v. Fisker Inc., U.S. District Court for the Central District of Calfornia, 2:23-CV-09976