Cataloging Fisker’s Waste and Mismanagement

by Greg Pollowitz

The National Legal and Policy Center has a good piece up today on Fisker and its history of bad financial decisions. Here’s the key excerpt;

That DOE granted the loan at all is bewildering, if Reuters’ report is accurate. Only launched as a company in 2007, Fisker was already desperate for cash.

“We are oversubscribed in this equity round with the Energy Department support — and nowhere without it,” wrote Barny Koehler, a business partner of Henrik Fisker’s, in an August 2009 email to Energy Department officials.

That DOE granted the loan at all is bewildering, if Reuters’ report is accurate. Only launched as a company in 2007, Fisker was already desperate for cash.

“We are oversubscribed in this equity round with the Energy Department support — and nowhere without it,” wrote Barny Koehler, a business partner of Henrik Fisker’s, in an August 2009 email to Energy Department officials.

The First State follies were not Fisker’s only waste. According to Reuters the DOE move opened a “flood” of investment for the company, but all that meant was the company had more money to fritter away – an estimated $1 billion through 2012. Fisker lost $35,000 on each of the 2,450 Karmas it produced the last two years (none were made in the past year), and the report quoted a former executive who said the Karma “cost far more to produce than we could ever charge for it.”

There was a roadmap for Fisker. The VC’s made the initial investments, the DOE came to the rescue with its loan – allowing the company to raise even more money, and then the company would go public (like Tesla), and everything would be fantastic. Except Fisker didn’t go public, and now the company is on the verge of bankruptcy. Another great job by the due-diligence folks at the DOE.

 

 

 

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