(Reuters) -Electric Vehicle (EV) startup Faraday Future Intelligent Electric plans a one-for-three reverse stock split to regain compliance with listing requirements, it said on Sunday.
The share consolidation is expected to come into effect on Feb. 29 and would mark the company’s second reverse stock in five months after a cash crunch and supply-chain issues wiped nearly 99% of its market value last year.
On Friday, shares of the firm closed at $0.09, giving the company a market value of about $11 million.
The Nasdaq had sent a notice to the California-based company in December, warning that its shares were at risk of a delisting after trading below the exchange’s $1 minimum trading price for 30 consecutive business days.
Faraday Future, which has struggled with years-long production delays, reported a quarterly loss of $78.05 million in quarter ended in September.
Growth in the global EV market is expected to slow to 27.1% this year from an estimated growth of 29% in 2023, according to January projections by research firm Canalys.
Peer EV firm Nikola’s shares are also trading below $1 and are at the risk of a delisting, down from a $80 peak hit just days after going public in June 2020.
Faraday Future CEO Matthias Aydt said on Monday the firm was “prioritizing cash flow breakeven over volume to avoid scaling production too quickly, which has been an issue for many competitors.”
The remarks came just days after rivals Rivian Automotive and Lucid Group forecast 2024 production below estimates as they deal with the stagnation in demand for EVs.
(Reporting by Priyanka.G in Bengaluru; Editing by Tasim Zahid)
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