Why is Fisker stock up 35% today?

© Reuters. Why is Fisker stock up 35% today?

US electric vehicle (EV) startup Fisker (NYSE:) saw its stock price crash more than 35% earlier this week on reports that the company hired restructuring advisers in face of a potential bankruptcy.

Facing risks of exhausting its cash reserves within the year, the company has engaged FTI Consulting for financial consulting services and the law firm Davis Polk to explore legal options concerning potential bankruptcy proceedings.

However, the stock recovered sharply in premarket trading Friday after the carmaker said it is progressing with its business plan to raise funds and is in talks with a major auto company.

“Fisker is focused on raising additional capital and engaging in a strategic partnership with a large automaker. The company is also continuing to pursue its shift to a dealer partnership model in both North America and Europe,” the startup said in a statement Thursday.

FSR was up 35.1% in the Friday premarket.

“As a matter of company policy, Fisker does not comment on market rumors and speculation,” Fisker stated. “However, Fisker often works with outside advisors to help manage its business and assist in developing and executing strategies,” it added.

Last month, Fisker issued a “going concern” warning, indicating it might deplete its cash reserves before the year ends. In late February, Fisker postponed the release of its complete financial results for 2023, citing a shortage of sufficient accountants.