Faraday Future shares have fallen more than 30 percent since it announced on November 16 that it would delay its earnings report.
Just four months after going public, California-based electric vehicle maker Faraday Future's move to delay its earnings report has put it in the spotlight.
"We postponed the earnings release because we were asked by our board of directors to conduct a self-examination in response to the short-selling incident, and the results will definitely be released on time," the company was quoted as saying by the Securities Daily, China's official securities newspaper, on Sunday.
The person did not explain further about "on time," but appeared to be referring to the delayed schedule.
Faraday Future's two main businesses are unaffected, and it is going full steam ahead with the mass production of the FF91, with the first cars to be delivered on time in July next year, the source said, adding that the company is in talks about landing its China headquarters.
In July, Faraday Future went public on Nasdaq through a merger with a special purpose acquisition company (SPAC) at an offering price of $13.78 per ADS.
The company said on November 16 that it notified the SEC that it was unable to file its Form 10-Q for the fiscal quarter ended September 30, 2021, within the required time frame.
That's because the company's board of directors formed a special committee of independent directors to review allegations of inaccurate disclosures, including claims made in a report issued by an investor with a history of seeking to depress public company stock prices for its own benefit.
The company did not explicitly mention it, but it was supposedly referring to short-seller J Capital Research, which early last month stated outright that "Move Over Lordstown: There's a New EV Scam in Town."
On November 23, the company's website said in a statement that it had received a letter from Nasdaq dated November 17 saying the company did not comply with Nasdaq listing rules.
The company said the letter from Nasdaq was expected because it would delay filing its third-quarter financial report.
The letter suggested the company its allowed 60 calendar days to submit a plan to regain compliance, and that Nasdaq staff could grant the company a waiver of up to 180 calendar days, Faraday Future said.
The company recently released some financial data showing it lost $280 million in the third quarter, saying that was largely due to increased costs as its manufacturing facilities went into full commercial production.
Faraday Future shares have fallen more than 30 percent since it announced on November 16 that it would delay its earnings release.
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