(Reuters) -Shares of Faraday Future Intelligent Electric slumped on Wednesday, after the cash-strapped electric-vehicle company announced plans to raise up to $90 million through a stock offering as it attempts to improve its funding.
The company intends to use the proceeds for working capital. The newly appointed CEO Matthias Aydt also said the firm was working towards improving its cash position, and introducing cost controls and fixing supply chain issues.
Faraday Future is in active discussions with strategic investors to improve the funding issue, Aydt said.
Shares of the company, that has a market value of $45.75 million, dropped 30% to $1.76, after hitting a record low of $1.66 moments after the market opened.
The offering allows the EV firm to move away from additional convertible notes financing, on which it had to rely over the past year.
The firm is battling a governance dispute with one of its largest shareholders, FF Top Holding, and raised doubts about its ability to continue as a “going concern” last year. Its shares have dropped over 85% so far in 2023.
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Earlier this month, the company alleged there was a “coordinated effort” to undermine its valuation.
(Reporting by Medha Singh in Bengaluru; Editing by Krishna Chandra Eluri)