Faraday Future (NASDAQ: FFIE) stock soared in pre-market trading Thursday after the EV maker issued a plan to regain Nasdaq compliance.
Faraday Future announced plans to seek stockholder approval for a reverse stock split of its common stock at its upcoming annual meeting. The Board of Directors has proposed a reverse split ratio ranging from 1-for-2 to 1-for-40 shares, accompanied by a reduction in the total authorized shares of common stock. The Board will determine the final ratio after stockholder approval, with the option to reconsider or delay the split based on market conditions.
This move follows Nasdaq’s issuance of deficiency notices due to FFIE stock price falling below required thresholds and delayed financial filings.
FFIE stock fell below Nasdaq’s minimum bid price threshold last December, resulting in a deficiency notice. Subsequently, the company faced additional compliance challenges when it failed to file its 2023 Annual Report on Form 10-K on time, alongside its stock price dropping below $0.10 for an extended period, triggering another deficiency notice and a risk of delisting.
Faraday Future requested a hearing with the Nasdaq Hearings Panel to address these issues and regain compliance. While awaiting the Panel’s decision, the company remains committed to meeting all Nasdaq and SEC rules and requirements.
Faraday Future has undertaken several actions to maintain compliance with regulatory requirements and avoid potential delisting. These actions include filing its 2023 Annual Report on Form 10-K by the end of May, engaging a new independent auditor, and preparing to file its first quarter Form 10-Q by the end of July. Additionally, the company has filed a preliminary proxy statement proposing a reverse stock split.
The proposed reverse stock split aims to increase the market price of Faraday Future’s common stock, which helps mitigate the risk of delisting.
Faraday Future (NASDAQ: FFIE) Stock Reaction
As of 07:49 a.m. (Eastern Time) Thursday, FFIE stock traded at $0.5384, marking a 17.42% increase compared to the previous trading session.
