Faraday Future Announces That It Resolutely Opposes a Reverse Stock Split, Is Committed to Maintaining Nasdaq Listing

Rhea-AI Summary

Faraday Future (NASDAQ: FFAI) has announced a five-point action plan to protect stockholder value and counter potential illegal short selling. The company firmly opposes a reverse stock split unless required to maintain Nasdaq listing compliance. The plan includes:

1. Capital Strategy: Optimizing capital structure and investigating potential illegal short selling
2. Addressing tariff pressures through government engagement
3. Accelerating FX vehicle program with first rollout by year-end
4. Hosting Investor Community Day on April 24
5. Implementing organizational reforms

The announcement follows market rumors after a Form D submission that led to stock price volatility below $1.00. The company reports strong progress on its FX program, with the Super One model expected to debut in late June. FX CEO Max and team are scheduled to meet with White House decision-makers to discuss U.S.-China EV cooperation.

Positive

• Company expects to announce substantial orders and cooperation agreements soon
• Strong interest from U.S. consumers, fleet operators, and car rental partners
• FX vehicle program on track for first rollout by year-end
• Management planning new round of executive share purchases

Negative

• Stock price dropped below $1.00, risking Nasdaq compliance
• Potential short-term impact from recent tariff developments
• Possible shareholder dilution from equity and convertible debt offerings

Insights

Financial Analyst

Faraday Future faces Nasdaq delisting risk with stock below $1; announces anti-short selling plan while avoiding reverse split unless absolutely necessary.

Faraday Future's announcement reveals significant challenges as the company's stock has fallen below the crucial $1.00 Nasdaq compliance threshold. This development triggers potential delisting concerns, though the company has a standard 180-day compliance period before facing mandatory action.

The company's five-point strategy appears primarily defensive rather than transformative. While FFAI firmly opposes a reverse split (which would maintain listing compliance by artificially raising the share price), this stance ultimately depends on market performance. If the stock remains below $1.00 for 30 consecutive business days, Nasdaq's deficiency notice initiates a countdown where FFAI must either recover organically or eventually implement a reverse split despite current opposition.

Most concerning is the capital structure situation. The reference to "equity and convertible debt offering proceeds" suggests continued reliance on dilutive financing. With a micro-cap valuation of approximately $82.8 million, additional equity raises would significantly dilute existing shareholders, potentially creating downward pressure on the already struggling share price.

The alleged "illegal short selling" investigation appears more like investor relations messaging than substantive corporate action. Short interest may be a symptom rather than cause of FFAI's challenges in a highly competitive EV market where production timelines continue shifting forward (now targeting year-end for FX vehicle rollout).

The forthcoming organizational reforms mentioned likely signal cost-cutting measures ahead, though specifics remain absent. Ultimately, FFAI needs meaningful operational progress and revenue generation rather than financial engineering to create sustainable shareholder value.

Automotive Industry Expert

FFAI's vehicle production timeline faces tariff headwinds and execution risks; year-end rollout target lacks credibility given historical delays.

Faraday Future's announcement regarding its FX program progression contains critical timeline claims that warrant skepticism. The company states it has "entered a sprint for the first vehicle rollout by year-end" with on-road testing beginning next week and the Super One model debuting in late June. However, this accelerated schedule lacks substantiation given the company's extensive history of missed production targets since its founding in 2014.

The tariff situation presents a particularly concerning challenge for FFAI's "bridge model" strategy. While the company frames potential new tariffs as a "strategic opportunity," the reality is that increased tariffs on Chinese imports would significantly impact their cost structure and pricing strategy for vehicles with Chinese manufacturing components. The meetings with White House officials, while portrayed as strategic positioning, appear more reactive than proactive.

Most revealing is the acknowledgment that "recent tariff developments may bring short-term impact to our FX strategy." This understated admission likely masks potentially severe disruptions to their supply chain and manufacturing plans. For context, recent proposals have discussed raising EV tariffs from China to as high as 100%, which would fundamentally challenge FFAI's cross-border business model.

The claimed "strong inquiries" from U.S. consumers, fleet operators, and rental partners lacks quantification or named partnerships, raising questions about the substantive nature of these discussions versus actual binding commitments. The promise of "substantive orders" announcements "shortly" continues a pattern of forward-looking statements without concrete delivery.

For investors, the central question remains FFAI's ability to execute vehicle production at scale with positive unit economics—neither of which has been demonstrated yet.

• FF will continue optimizing its capital structure, with an unwavering commitment not to pursue a reverse stock split unless required to maintain its Nasdaq listing.
• FX CEO Max and his core team have arrived in Washington, D.C., driving the FF 91, and will meet with key decision-makers at the White House on Thursday. This is not only a business engagement — it reflects our deeper role as a “U.S.–China EV bridge” in shaping future policy directions.
• The FX program is progressing well, and we’ve entered a sprint for the first vehicle rollout by year-end.
• Deep Organizational Reform to Unlock Execution and Growth Potential
• On April 24, FF will host an Investor Community and Co-Creation Day in Los Angeles.

LOS ANGELES--(BUSINESS WIRE)-- Faraday Future Intelligent Electric Inc. (“FF” or the “Company”) (NASDAQ: FFAI) today announced a five-point action plan aimed at protecting stockholder value and countering misinformation about the company and potential illegal short selling.

FF 91 2.0 Futurist Alliance

Following the submission of a Form D yesterday, a wave of market rumors began to circulate — including false claims that the Form D indicates executive stock sales, that a reverse stock split would be triggered immediately if our share price drops below $1.00 per share, and that new tariff uncertainties would derail the FX strategy and “bridge model” execution. FFAI’s stock price experienced abnormal volatility and closed below $1.00 per share.

In response, the Company makes the following statement: FF stands firmly with its stockholders. We resolutely oppose a reverse stock split and are fully committed to maintaining our Nasdaq listing.

To defend stockholder value and confidence, the Company is launching five major initiatives — the official start of our “Battle to Achieve the Dream Counterattack Against Potential Illegal Short Selling.”

We are confident that through these initiatives, we can remain compliant without a reverse stock split, accelerate a return to true value, and even create greater miracles for the market. The Five Major Initiatives Are:

1. Capital Strategy Offensive:

Firm no to a reverse stock split, unless the stock price consistently fails to meet the compliance standards. FF will continue optimizing its capital structure, with an unwavering commitment not to pursue a reverse stock split unless required to maintain its Nasdaq listing.

Equity and convertible debt offering proceeds will be strategically deployed to support business development targeting maximum value and measured dilution.

The Company previously launched an investigation into potential illegal short selling and sent letters to multiple brokers. We intend to launch a new round of investigation. We do not rule out taking legal action.

FF also intends to initiate a new round of executive share purchases, with broader participation across the leadership team, in the next open trading window which is currently closed. The formal implementation will depend on the legally allowed timeframe and any other necessary conditions.

Over the past year, FF has seen explosive growth in trading volume, share price activity, and retail investor attention, and is widely followed by both U.S. and Chinese investors.

With ongoing breakthroughs in the FX strategy, bridge model, and business fundamentals, the release of true value in the capital market is just beginning.

2. Turning Tariff Pressure into Strategic Opportunity

We acknowledge that recent tariff developments may bring short-term impact to our FX strategy. However, in the mid-to-long term, this could prove to be a strategic opportunity. FF is actively engaging with the U.S. government and has submitted constructive proposals regarding automotive policy, particularly involving U.S.–China cooperation in the EV sector. We are also formally expressing our pathway and policy expectations for the development of FF and the FX brand in the U.S. market.

Following an in-depth industry discussion including FF Global President Jerry Wang and Eric Trump last week, FX CEO Max and his core team have arrived in Washington, D.C., driving the FF 91, and will meet with key decision-makers at the White House on Thursday. This is not only a business engagement — it reflects our deeper role as a “U.S.–China EV bridge” in shaping future policy directions.

3. FX Strategy Accelerating — Countdown to First Vehicle Roll-Off

The FX program is progressing, and we’ve entered a sprint for the first vehicle rollout by year-end.

FX will begin on-road testing next week in various real-world conditions, including autonomous driving system validation.

The Super One, FX’s first production model, is expected to debut in late June, with pre-orders to follow. We are receiving strong inquiries from U.S. consumers, fleet operators, and car rental partners. Market feedback has far exceeded expectations, and we expect to announce substantive orders and cooperation shortly.

4. Strengthened Transparency and Engagement — “Investor Community and Co-Creation Day” Set for April 24

We will further increase transparency and real-time communication with our stockholders to close the information gap, eliminate misunderstandings, and highlight FF’s fundamental progress.

On April 24, FF will host an Investor Community and Co-Creation Day in Los Angeles. This hybrid event will gather retail investors, vehicle owners, co-creation officers, and community members to engage in open, face-to-face dialogue. It’s a unique opportunity for all stakeholders to experience our vision, value, and strategy firsthand.

5. Deep Organizational Reform to Unlock Execution and Growth Potential

In the coming weeks, FF will initiate a comprehensive organizational and governance transformation aimed at eliminating long-standing inefficiencies and unleashing full operational potential.

We will hold a Company-wide town hall meeting next week to announce and deploy this undertaking — ushering FF into a new chapter of high-efficiency execution and value creation.

“In the face of potential illegal short selling, market rumors, and external uncertainty, FF will always stand with its stockholders. We are resolutely against a reverse stock split and fully committed to protecting our Nasdaq listing. This is not just about defending our Company’s value — it’s a declaration of our belief in longtermism and the dream we’re building together. True value will rise above the noise and be recognized by the market,” FF Global President Jerry Wang stated., “The unwavering support of our stockholders has saved FF — we’ve already won the first phase of the Dream Defense Battle. Moving forward, we will stand even more firmly with our investors and fight for their interests. I have full confidence that we can maintain compliance without a reverse stock split, close the gap between capital value and real value, and even create something truly extraordinary.”

ABOUT FARADAY FUTURE

Faraday Future is a California-based global shared intelligent electric mobility ecosystem company. Founded in 2014, the Company’s mission is to disrupt the automotive industry by creating a user-centric, technology-first, and smart driving experience. Faraday Future’s flagship model, the FF 91 2.0 Futurist Alliance, exemplifies its vision for luxury, innovation, and performance. The new FX strategy aims to introduce mass production models equipped with state-of-the-art luxury technology similar to the FF 91 2.0, targeting a broader market with middle-to-low price range offerings. For more information, please visit https://www.ff.com/us/.

FORWARD LOOKING STATEMENTS

This press release includes “forward looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements, which include statements regarding Nasdaq compliance, capital strategy, the impact of U.S. tariff policies, FX and bridge strategy targets and goals, and initiating organizational and governance changes, are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include, among others: the uncertain impact of U.S. trade and tariff policies, which remain highly dynamic and unpredictable; the Company’s ability to secure the necessary funding to execute on the FX strategy, which will be substantial; the Company's ability to secure necessary agreements to license and/or produce Super One, FX 5 or FX 6 vehicles in the U.S., the Middle East, or elsewhere; the Company's ability to homologate the Super One, FX 5 or FX 6 for sale in the U.S., the Middle East, or elsewhere; the Company's ability to secure necessary permits at its Hanford, CA production facility; the Company’s ability to continue as a going concern and improve its liquidity and financial position; the Company’s ability to pay its outstanding obligations; the Company's ability to remediate its material weaknesses in internal control over financial reporting and the risks related to the restatement of previously issued consolidated financial statements; the Company’s limited operating history and the significant barriers to growth it faces; the Company’s history of losses and expectation of continued losses; the success of the Company’s payroll expense reduction plan; the Company’s ability to execute on its plans to develop and market its vehicles and the timing of these development programs; the Company’s estimates of the size of the markets for its vehicles and cost to bring those vehicles to market; the rate and degree of market acceptance of the Company’s vehicles; the Company’s ability to cover future warranty claims; the Company faces competition from multiple sources, including new and established domestic and international competitors; the performance and security of the Company’s vehicles; changes in U.S. and international trade policies may adversely impact our business and operating results; current and potential litigation involving the Company; the Company’s ability to receive funds from, satisfy the conditions precedent of and close on the various financings described elsewhere by the Company; the result of future financing efforts, the failure of any of which could result in the Company seeking protection under the Bankruptcy Code; the Company’s indebtedness; the Company’s ability to cover future warranty claims; the Company’s ability to use its “at-the-market” program; insurance coverage; general economic and market conditions impacting demand for the Company’s products; potential negative impacts of a reverse stock split; potential cost, headcount and salary reduction actions may not be sufficient or may not achieve their expected results; circumstances outside of the Company's control, such as natural disasters, climate change, health epidemics and pandemics, terrorist attacks, and civil unrest; risks related to the Company's operations in China; the success of the Company's remedial measures taken in response to the Special Committee findings; the Company’s dependence on its suppliers and contract manufacturer; the Company's ability to develop and protect its technologies; the Company's ability to protect against cybersecurity risks; and the ability of the Company to attract and retain employees, any adverse developments in existing legal proceedings or the initiation of new legal proceedings, and volatility of the Company’s stock price. You should carefully consider the foregoing factors, and the other risks and uncertainties described in the “Risk Factors” section of the Company’s Form 10-K filed with the SEC on March 31, 2025, and other documents filed by the Company from time to time with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250417481522/en/

Investors (English): ir@faradayfuture.com

Investors (Chinese): cn-ir@faradayfuture.com

Media: john.schilling@ff.com

Source: Faraday Future

FAQ

What are the 5 initiatives announced by Faraday Future (FFAI) to protect stockholder value?

FFAI announced: 1) Capital strategy opposing reverse stock split 2) Converting tariff pressure to opportunity 3) Accelerating FX vehicle program 4) Increasing investor transparency 5) Implementing organizational reforms

When will Faraday Future's Super One model debut and begin pre-orders?

The Super One, FX's first production model, is expected to debut in late June 2024, followed by pre-orders

Will Faraday Future (FFAI) implement a reverse stock split to maintain Nasdaq listing?

FFAI firmly opposes a reverse stock split unless absolutely required to maintain Nasdaq listing compliance

What is the significance of FFAI's upcoming White House meeting?

The meeting aims to discuss automotive policy and U.S.-China cooperation in the EV sector, positioning FFAI as a 'U.S.-China EV bridge'