EV startup $Faraday Future Intelligent Electric Inc. (FFIE.US)$ announced on Thursday that it suspects a "coordinated effort" to undermine the company's valuation.
What Happened: The company has observed a series of "suspicious activities," leading it to believe there are efforts to undermine its valuation through the "spread of misinformation and manipulation of market sentiment." This was stated in a press release without further details.
The company has initiated an investigation into the matter and stated its intent to take legal action if it discovers any illegal short selling, market manipulation, or misinformation.
Faraday also encouraged its shareholders to exercise vigilance and conduct due diligence before making investment decisions. Additionally, the company pledged to continue providing timely updates regarding its performance and future prospects.
Faraday Future did not immediately respond to a request for comment from Benzinga.
Why It Matters: The California-based company has faced numerous challenges, including production delays and funding issues.
The company effected a 1-for-80 reverse stock split late last month.
In July, Faraday Future identified errors in its previously issued financial statements for 2022 and the quarters ending in March 2023 and September 2022. The company stated that these financial reports should no longer be relied upon and confirmed ongoing efforts to restate them.
Price Action: Faraday Future shares closed down 23.7% on Thursday at $3.89 and fell 1.5% after hours. Year to date, the stock has dropped nearly 82%, according to data from Benzinga Pro. The company now has a market cap of about $73 million.