Faraday Future Intelligent Electric (FFIE) is falling in after-hours trading after announcing a new stock offering for investors. The electric vehicle producer has spent the past year declining, losing more than 90% of its value. Now, the penny stock is tumbling again after Faraday announced plans to sell an additional 29.66 million Class A common stock shares.
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This decision is likely to push FFIE stock down even further, as investors often fear share dilution and confidence in the penny stock probably isn’t high, to begin with.
What’s Going On with Faraday Future?
After finishing this week down 1.5% at the close of markets today, Faraday Future has declined even further. As of this writing, it is down 2% after hours. This trend of decline could easily continue into next week. Indeed, FFIE stock has plunged 83% in just the past three months but now it could easily fall below $2 per share.
Faraday hasn’t been a strong performer in years, struggling and failing to hold its own against larger companies in an EV market full of increasing competition. Earlier this month, the company signed an agreement to expand its operations into the UAE market, but so far, this hasn’t helped boost share prices.
Now, in a clear attempt to generate quick cash, Faraday has filed to sell new shares. This typically signals distress, as it risks diluting the positions of current investors and make trigger a selloff. Faraday’s latest decision is risky, but at this point, it may not have much to lose.
Is It Time to Sell Faraday Future Stock?
Wall Street analysts haven’t issued any recent ratings on Faraday, likely due to its penny stock status. However, data from Fintel shows that investors are increasing their bets against FFIE stock. Short interest currently accounts for 38% of Faraday’s float, and those selling it short require just 0.64 days to cover their positions. The fact that the bears are closing in on FFIE stock suggests that they believe it has even further to fall, a likely scenario given the new share offering.
