Economic Observer Network reporter Pu Zhenyu “We believe that the electric SPAC (Special Purpose Acquisition Company) Faraday Future (hereinafter referred to as “FF”) will never sell a car. So far, FF is just a bucket. It collects the funds raised from American investors. Invest in the debt black hole created by its founder and China’s most famous securities fraudster Jia Yueting.” On October 7, local time, US short-selling agency J Capital Research issued a short-selling report, accusing FF of being an electric car. scam.
Regarding the short-selling report released by Miqijin, it is reported that Jia Yueting responded through his personal social media circle of friends that day that Miqijin’s remarks were “fried and hot, nonsense,” and it was “not the first time. Was beaten in the face”.
On July 22 this year, FF successfully landed on Nasdaq through the merger with SPAC. According to the official plan, the mass production delivery of the futurist version of FF’s first mass-produced model FF 91 has entered the sprint stage from the dimensions of manufacturing, supply chain, and user ecology. FF will be implemented within 12 months after the launch. Commitment to deliver FF 91.
However, Miqijin believes that FF cannot fulfill its delivery promise. In its short-selling report, it stated, “FF promises to restart its abandoned factory in Hanford, California and mass-produce cars within 7 months. We doubt whether this timetable will be possible. Establishment: During our three recent visits to its factory, we found that there was almost no action there. The former executives of FF told us that FF still has engineering problems to be solved.”
Regarding the questioning of the short-selling report, some reports quoted the response of FF related persons, saying that FF has been in product strength in the process of mass production and delivery of FF 91 in the more than two months since it landed on Nasdaq on July 22. Significant progress has been made in areas such as promotion, product testing, supply chain, manufacturing, sales, business development, and top talent recruitment. Everything is progressing as planned. We are confident that FF 91 will be delivered on time in July 2022.
It remains to be seen whether FF 91 can be delivered in July 2022. As a new car company that has only been established for more than seven years, FF’s development has indeed been bumpy and has experienced more than one ticket skipping.
Public information shows that FF was founded in May 2014, and Jia Yueting became the actual controller of FF in 2016. In June 2018, FF, which had just received funding from Evergrande Health, a subsidiary of Evergrande Group, announced that it will achieve mass production of its first model FF 91 by the end of 2018 and deliver it in the first quarter of 2019. However, after October 2018, Jia Yueting and Evergrande began to have disputes over the control of FF, and FF was therefore unable to mass-produce at the end of 2018.
At the end of 2018, although Jia Yueting reached a reconciliation with Evergrande, FF and the latter have gradually moved away and continue to face the problem of lack of funds. In January 2019, Jia Yueting publicly stated that FF is “only one step away from mass production.” But this moment is coming late. Until July 2020, Jia Yueting’s statement turned into FF “only one step away from delivery.”
The reasons why Meqijin questioned the prospects of FF’s mass production delivery are mainly based on the combing and analysis of FF’s car manufacturing history. Its short report mentioned that FF has not delivered cars for eight years, and now it is again delaying the time to “next year”. ; FF has violated its commitment to build factories in five places in the United States and China, and has repeatedly postponed the process of building the sixth factory; FF is being sued by dozens of non-payment suppliers and has failed to disclose its assets in China Has been frozen by the court.
Regarding the above-mentioned “arguments” of Miqijin, Bai Yiyang, manager of the research department of CMB International and an analyst in the automotive industry, told the Economic Observer reporter that Miqijin’s short report was mainly based on the history of FF, although it was held in August and September this year. I took a few photos of the FF factory, but these photos are not too dry, and the persuasiveness is limited.
However, Bai Yiyang also believes that the time left for FF’s mass production is indeed relatively tight. “After the completion of the IPO, FF has temporarily received a certain amount of financial support, but it needs to make up for its shortcomings in production, marketing, channels, and services. “.
In addition to the situation of FF itself, Miqijin also questioned the use of FF financing in the short selling report, and pointed the finger at Jia Yueting personally, saying “Jia Yueting’s debt is huge, and we have no doubt that he is using FF as his own. piggy bank”.
It is understood that in the United States, Jia Yueting’s personal bankruptcy reorganization plan has taken effect in July 2020, and his personal debts in the United States have been directly discharged. However, in China, Jia Yueting is still facing debt pressure. Take the case information of “Sanya Shuguang Real Estate Development Co., Ltd. and Jia Yueting Related Private Loan Disputes” announced by the Beijing Third Intermediate People’s Court in September this year as an example. Jia Yueting was listed in the court in this case. For the person to be executed, the execution subject is 159 million yuan.
It is worth noting that Jia Yueting handed over the position of CEO of FF to Bi Fukang in February of this year, and he only worked at FF as “FF Partner, Chief Product and User Ecosystem Officer”. Although Jia Yueting completed this transfer of power, Meiqijin believes that “Jia Yueting still controls FF’s key spending decisions through FF global executives.”
“FF may soon transfer the funds of American investors to private hands. After merging with SPAC, the remaining notes payable on the FF account is 127.8 million U.S. dollars. Jia Yueting and other related parties have already completed the SPAC on July 21 this year. At the time of the merger, US$68.7 million was cashed out. We do not doubt that he needs this money-Jia Yueting was once required to repay US$6.6 billion in personal debt.” The short report stated.
In fact, FF is not the first Chinese concept stock to be “sniped” by Miqijin. Miqijin has previously issued short selling reports against companies such as BeiGene, Uxin, JD.com, and Fanhua Financial Holdings, but it has not yet Obvious results have been achieved.
On April 17, 2019, Miqijin issued a short selling report, which directly pointed to the major problems of China’s used car e-commerce platform Uxin, including the overstated car sales by 40%, the high debt level, and the risk of bankruptcy. And the founder, Dai Kun, stole $280 million from the company. On the same day, Uxin’s stock price encountered two lower limits, with a drop of 50% at one time.
But this round of short selling hit Uxin’s stock price only for one day. On April 18, Uxin issued a statement refuting that the allegations in the Miqijin report had no factual basis and were a distorted interpretation of facts. On the same day, Uxin’s stock price rebounded rapidly, with an opening increase of 15%, and finally closing at $2.95, an increase of more than 51%.
At present, FF stock price has not been affected by the short report of Miqijin. As of the close of trading on October 7th, Eastern Time, FF’s stock price was reported at 8.4 US dollars per share, up 9.8%, and the company’s market value was 2.72 billion US dollars.
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