Recently, Faraday Future was maliciously shorted by the agency, and Jia Yueting urgently responded to "cold rice and hot stir-fry, nonsense", but it seems to be useless, and there is a situation of wall falling and everyone pushing. According to the latest foreign media reports, law firm Bernstein Litowitz Berger & Grossmann LLP (hereinafter referred to as BLB&G) will launch an investigation into whether Faraday Future violated US federal securities laws. The BLB&G investigation focused on whether Faraday Future transmitted misleading information to investors about its eviction capacity.
The firm's investigation was sparked by A.S. short-selling agency J Capital Research on October 7 releasing a short-selling report on Faraday Future, bluntly saying it was unlikely to sell a car. In the capital market, Faraday's future performance is not optimistic, less than three months after listing, the stock price is almost waist-cutting.
It is understood that the US securities law allows the existence of short-selling mechanisms, and short-selling institutions generally issue research reports through analysis, due diligence, etc., to provide short-selling information for the market, thereby suppressing stock prices and stock indexes, etc., and obtaining profits from relevant stakeholders. So, what "crimes" does this 28-page short-selling report give Faraday The Future?
A scam to fill a debt?
"We don't think Faraday future can sell a car. So far, it's just a barrel of money collected from U.S. investors and poured money into a debt black hole created by its founder, Jia Yueting, China's best-known securities fraudster. The report said bluntly.
The repeated delays in the delivery of Faraday's new cars, as well as Jia Yueting's past debts and reputation, are the focus of the short-selling agency attack. Eight years into its existence, Faraday Future "failed to deliver a car and again said 'deliver next year'," "failed to deliver the promise to build a factory in five locations in the U.S.," "was sued by dozens of suppliers," and "failed to disclose the fact that its Chinese assets have been frozen by local courts," the report said.
For the attack on short-selling institutions, Jia Yueting replied that "cold rice is hot and fried, nonsense." J Capital Research, please be careful, this is not the first time you have been punched in the face. He also announced the mass production time of the new car: "In July 2022, Hanford, California, the birth of a new species is coming. The "new species" here most likely refers to the FF 91 that will be mass-produced. In fact, when FF 91 debuted in early 2018, Faraday Future gave the slogan "New Species, Reconstruct the Future".
Faraday Future presents a fully automated manufacturing system for the FF 91 lightweight aluminium body
Factories "quietly", orders "fake"?
Whether Faraday can mass-produce as scheduled in the future, the above report puts a question mark. In September, Faraday Future announced that it was making progress in production, with only $90 million needed to start mass production within seven months. However, the report notes that former company executives don't think the car is ready to be officially produced, with one former executive saying "it simply can't be true" and another saying there are still some key engineering issues.
In addition, in terms of factories, from August to September this year, J Capital Research investigators went to Hanford, California, three times to investigate the progress of Faraday's future factory construction, and found that there were only few construction activities, and the site was quiet. Images taken by investigators showed the factory's doors and windows locked, only a few SUVs and vans, and the parking lot area was also empty. This is obviously not normal. According to the report, the Hanford plant is the only factory that Faraday is still building in the future, and the remaining five factories in the plan have long been "rotten".
In addition, the report questioned faraday's future order fraud. Earlier this year, Faraday Future revealed in a roadshow document that it had received orders for 14,000 FF 91s. By September of this year, Faraday Future said that the first limited edition FF 91 models had only 300 units. The report pointed out that 78% of the previous 14,000 orders came from the same private company, and it was strange to pay a large deposit when the new car had not yet completed research and development and set up production facilities, suspecting that it was Faraday's "affiliate" of Future.
Question executive conduct and predict a sell-off
Jia Yueting's actual control over Faraday Future, as well as the past history of many faraday Future executives, has also become the target of the report attack.
As we all know, Jia Yueting left a mess of LeTV in 2017 and ran to the United States to build a car, and was repeatedly included in the list of dishonest executors by China. Faraday Future's current CEO, Bi Fukang, was the co-founder of Byton Motors, and Byton has fallen. Faraday Future unveiled three executives in September, one from the startup Lordstown, which is also suspected of using fake orders to raise funds and was investigated by the SEC, and two from Cama, which has little presence.
In addition to Jia Yueting and Faraday Future, the report also "blacked" a faraday future shareholder Evergrande, saying that Evergrande, which is "in danger", will sell all of its 20.5% or more Faraday Future shares as soon as January 2022, that is, after the lock-up period. Such instability may be a "thunder" for Faraday's future finances.
Judging from the harsh wording in the report, the short-selling agencies intend to spare no effort to suppress Faraday's future, and some of the content does have factual basis, but there is no lack of exaggeration. Faraday's future seems to have been less optimistic from the beginning, but it has also stumbled through several years, especially after the NASDAQ listing, and the car building has obviously had a realistic meaning. However, there is not so much time left for Faraday's future, and the best way for short-selling agencies to fight back is to come up with mass-produced products.
(Note: The picture in this article comes from the company's Weibo)
Text: Zhang Dongmei Editor: Qi Meng Typography: Liu Xiaoye