Fisker Inc. Announces Convertible Debt Offering

Shares of Fisker Inc. experienced a decline on Friday, following the company's announcement of its plans to offer additional convertible debt to an existing institutional investor.

Offering Details

Fisker Inc. intends to offer $170 million of 0% senior unsecured convertible debt due in 2025 to the investor. With an original issue discount of approximately 12%, the offering is expected to generate gross proceeds of $150 million for the company.

Stock Performance

Prior to the announcement, the stock (FSR) had enjoyed a three-day winning streak, with a 20.5% increase in value. However, it dropped by 4.8% in premarket trading, breaking the streak.

Amendment to Securities Purchase Agreement

The planned offering is part of an amendment to a securities purchase agreement that was announced by Fisker Inc. on July 10. Initially, the company had announced a $340 million convertible note offering, which had the potential to double to $680 million.

Increased Offering Potential

As a result of the new securities purchase agreement, Fisker Inc. may now offer up to an additional $623.3 million in convertible debt. This could potentially result in gross proceeds of up to $550 million for the company.

Fisker's Performance

Throughout the year, Fisker Inc.'s shares have experienced a decline of 12%. In comparison, the Global X Autonomous & Electric Vehicles ETF (DRIV) has rallied by 18.5%, while the S&P 500 index (SPX) has advanced by 12%.

Fisker Inc. made waves earlier this year with the introduction of their first electric vehicle, the Fisker Ocean SUV.