The Major CatalystS for This
Fisker – a Tesla type EV maker.....
Fisker, for one, has all the makings of a Tesla type EV maker: It’s got
a new idea in the right lane and a legend behind the wheel in the form of
Henrik Fisker. And it’s not just another EV SUV--it’s a vehicle made partly
with recyclable parts, a fact bound to ring loudly with all that environmental
and social impact money floating around out there dying for someplace to call
home. And dying for the next success like Tesla.
A Biden election win and a global push hastened further by a crippling
pandemic seal the deal on a $40-trillion energy transition of which
transportation will be the Holy Grail.
Electric vehicle stocks have been performing well since Joe Biden’s
presidential election win. Joe Biden’s focus on clean energy policy has been
supporting EV stocks over the past two months. In addition, the global demand
prospects are also strengthening as the majority of European countries plan to
ban fossil fuel vehicle production in the next decade.
Louis Bacon’s hedge fund Moore Capital Management - has generated
massive profits during the first year of trading after the macro hedge fund
manager decided to step back from managing investors’ money in 2019 and
consolidating its three funds into a single fund.
Louis Bacon’s Moore Capital has also expressed confidence in electric
vehicle manufacturer Fisker during the third quarter. The firm has bought 9.4
million shares of Fisker valued at $145 million.
Fisker's current sub-$5 billion fully diluted valuation signals it is
trading at a deep discount to EV peers.
Fisker's first model, the zero-emission Ocean.....
Ocean's competitive pricing stemming from leveraging Magna's
manufacturing capabilities, with an estimated 250k unit volume in 2025.
Fisker's first model, the zero-emission Ocean, is a five-person (with an
available third row seat) midsize SUV, with a 2WD and 4WD option, a 250 to 350+
mile range, and recycled material interior. The SUV is also decked out with a
large, curved screen and unique UI, 'California Mode' opening nine glass panels
with one touch, and a PV solar roof to enhance efficiency. A production-intent
prototype is slated for a summer 2021 unveiling.
The Ocean is entering the "large and rapidly expanding 'premium with
volume' segment (meaning a premium automaker producing more than 100,000 units
of a single model such as the BMW 3 Series or Tesla Model 3) of the electric
The manufacturing combination with Magna allows Fisker to scale production
quickly through FF-PAD (Fisker Flexible Platform Adaptive Design), with an
estimated time frame of 29 months to start of production, compared to 5 years
for a typical OEM. Magna's exclusive production of the Ocean in Europe and
recent developments within the manufacturing agreements deepen the
collaboration and look to set both parties up for success.
Fisker and Magna are collaborating on the FM29 platform, bringing a larger
battery and more occupant space to a wide frame vehicle, also providing the ultra-range
capability, announced during the "definitive
platform agreement and initial manufacturing agreement."
Fisker does not have revenues or net
incomes - although its $1 billion nest egg in cash and equivalents and
lack of debt help.
Fisker sits with a fully diluted valuation of $4.82 billion, with 324.5
million shares after exercise of all warrants, including the 19.5 million given
to Magna. On estimated annual volume of 200,000 units in 2025, and an average
selling price of $55,000 (slightly below Fisker's internal estimate of
$59,000), revenues would be $11 billion; if Fisker doesn't reach that scale,
but hits 150,000 units, revenues still could reach $8.25 billion, almost double
Analysts Thoughts –
Cowen analyst Jeff Osborne is optimistic about the future of the EV market,
and Fisker’s place in it.
“[We] believe Fisker is
well-positioned to win share in the changing auto space as the industry
undergoes a paradigm shift away from ICE vehicles toward EVs. The auto industry
continues to move toward an electrified future with an increasing number of
government mandates ordering countries and auto producers alike to pivot toward
an EV-centric future. Consequently, we believe Fisker's flagship Ocean vehicle
- which is a premium EV with an affordable starting price of $37,499 - is
well-positioned to take share in the large and growing EV market," the
In line with these comments, Osborne rates FSR an Outperform (i.e. Buy), and
his $22 price target suggests the stock has ~45% upside potential