Faraday Future to reverse stock split, delays EV deliveries.

(Reuters) – Electric-vehicle startup Faraday Future Intelligent Electric is taking action to regain compliance with Nasdaq’s minimum bid price requirements. They have announced plans for a reverse stock split, a move aimed at increasing their share price.

Nasdaq requires shares to trade above $1, and if a company’s shares trade below that mark for 30 consecutive business days, Nasdaq sends a notice. Faraday Future has been trading below $1 for an extended period, prompting the need for a reverse stock split.

Companies in this situation have a 180-day period to bring their stock price above $1 for at least 10 consecutive days to comply with the rules. If they fail to do so, they may be granted a second 180-day period if they meet other requirements.

In May, Faraday Future received an additional 180-day extension from Nasdaq to meet the minimum bid price requirement after receiving a notice in January for not satisfying the continued listing rules.

Currently, Faraday Future’s stock is trading at $0.45.

Other electric vehicle companies, such as Nikola and Lordstown Motors, have also considered reverse stock splits to meet Nasdaq listing norms.

Faraday Future’s reverse stock split proposal includes a range between 1-for-2 and 1-for-90 shares of outstanding common stock. The final ratio will be determined by the Board following stockholder approval.

The Los-Angeles based company has faced financial challenges and a board reshuffle due to a governance dispute with one of its largest shareholders, FF Top Holding. Last November, Faraday Future expressed doubts about its ability to continue as a “going concern”.

Additionally, the company has announced a delay in the phase 2 delivery of its FF 91 2.0 Futurist Alliance vehicle, pushing it from the end of the second quarter to August 2023.

(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Krishna Chandra Eluri)

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