Incredible but true, in the most hi-tech world in the world, in the very modern startups that fly on the stock exchange and grind record valuations due to their extraordinary ability to attract financing, there is someone who has missed out on customer payments.
It's something you expect to happen to Morgan (which assembles cars by hand with wooden frames in vintage warehouses) but not to Fisker, accused of having lost track of millions of dollars in customer payments. An almost unbelievable management chaos that led to an internal audit that began in December and took months to complete.
In the end, despite its great quackery, the famous electric vehicle startup managed to track down most of these payments or request new ones from customers whose payment methods had expired. But the chaos took away employees and resources from Fisker's sales team at a very delicate moment, when the company was trying to save itself by restructuring its business model.
To understand the level of confusion, it is enough to say that Fisker missed transactions that included down payments and in some cases, the full price of the vehicles. Indeed, in some cases they were able to deliver machines without collecting any form of payment.
Obviously given the level of errors, in addition to the internal audit, the external auditor PwC also came into play and asked Fisker for more documentation on the sales of its vehicles as part of the process of drafting the company's annual financial report. But, even more incredibly, Fisker was often unable to provide satisfactory documentation, leading to further requests from PwC.
A mess so big that it put the company in the position of not being able to say precisely how much revenue it had generated, which is why Fisker has yet to present its annual financial report for 2023.
Now, anything goes, but if a hi-tech company like Fisker can't even keep track of payments (the ABC of every company) the doubts that arise are infinite: if they are such slobs in managing the accounting, what insurance can we have on the reliability of cars? Legitimate doubts and not just ours given that the startup is now on the verge of bankruptcy. And as Fisker suspended production of its only vehicle, the Ocean SUV, after struggling to meet internal sales goals and struggling to support customers facing a variety of quality issues.
That's why the New York Stock Exchange just suspended trading in Fisker shares and delisted the company, increasing the likelihood that the company won't be able to raise money to survive. A disaster that led to the cars still present in the dealer network being sold at a 39% discount. Meanwhile, at Morgan, they continue to produce classic cars in a barn and their company is thriving more than ever. A lesson for everyone.
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