In April, Faraday Future (FF) founder Jia Yueting was exceptionally active on Chinese social media platforms. He first successfully attracted public attention by criticizing Xiaomi Motors, and then recorded four videos in response to some of the questions raised by netizens.
For example, he mentioned that he has accumulated around $12 billion in debt guarantees for the LeEco system and has already repaid over $10 billion (which cannot be verified); Once again, the day when he successfully builds a car and pays off his debts is when he returns to his home country, and so on.
Through this series of operations, Jia Yueting has gained the attention he has received since his departure. But at the same time, the FF he founded once again reached the edge of a cliff, with its life hanging on the line.
On April 26th, FF announced that the company received a letter from NASDAQ on April 24th stating that due to the stock closing price being below $0.1 for ten consecutive trading days, which does not comply with NASDAQ listing rules, NASDAQ staff decided to delist FF's stock from the NASDAQ market.
However, delisting is not the final decision. FF stated that the company plans to apply for a hearing before May 1st (the latest allowed date) to appeal the delisting decision, which will extend the trading suspension period for FF stocks by 15 days. In addition, FF also intends to request the Nasdaq hearing panel to extend the suspension period to wait for the hearing.
Regarding the current situation of FF, Jia Yueting released another video on May 7th, announcing that he will serve as the co CEO of FF and start commercializing personal IP to make money in car manufacturing.
The already limited trust has been worn away
Regarding the delisting risk faced by FF, Jia Yueting first stated that he and the company's management will do their utmost to restore compliance and strive to maintain their listing qualification. According to its disclosure, FF submitted an appeal to NASDAQ on May 1st to maintain its listing qualification through compliance rectification.
Subsequently, he also reviewed the three development stages of FF after its listing and pointed out that the direct cause of the current crisis is funding issues, and the fundamental reason is confidence and trust issues.
In July 2021, FF was listed on NASDAQ, with a market value exceeding $5 billion at one point. But as of the closing of the US stock market on May 6th, FF's stock price was $0.041, with a total market value of approximately $1.76 million, a decrease of over 99.96% compared to the initial listing.
Jia Yueting stated that in the first stage after FF went public, SPAC directors used a large number of fictitious short selling reports and other excuses to establish a special committee, which almost completely controlled the company. They framed and suppressed Chinese startup teams, including myself, for personal gain, and improperly drove away many core Chinese executives. Even myself was almost excluded from the company by them.
"In just over a year, they and some of the top decision-makers in the management team almost burned out the nearly $1 billion they raised from going public, causing a significant delay in the production of FF 91 and a significant blow to investor confidence," said Jia Yueting.
The second stage is in 2022, where "the major shareholders, just management, and employees of the company survived adversity and ultimately succeeded in rectifying the situation. However, the shadow of the first stage remains shrouded, and my management authority is still greatly restricted." Jia Yueting said that although all management led the company to make good progress, the top management decision-making team composed of professional managers did not prioritize maximizing the company's interests under the premise of legality and compliance, did not make the necessary changes, and the operating conditions were far from expectations, which once again consumed everyone's trust in the company.
The third stage is the period since Matthias, who has been working at FF for 8 years, became the CEO. Jia Yueting said, "Matthias has brought many changes. In the SOD2 process, the company's technological capabilities have been significantly improved, and its cost control ability and fund utilization efficiency have been greatly improved. However, FF still faces heavy burdens and cannot break free from the shackles of history. A sincere and effective external communication mechanism has not been established, and trust and confidence are difficult to rebuild."
Jia Yueting intends to regain power
In Jia Yueting's view, the important reason for the series of problems that occurred after FF went public is that he did not directly control FF.
He said, "In 2019, I voluntarily gave up my position as CEO and hired a professional manager as CEO. After the establishment of the special committee, I was further deprived of the company's main and highest decision-making power. The company's core three decisive functional and business lines of finance, law, and supply chain, I have no right to participate in the final decision-making until today."
In the video, Jia Yueting used someone else's words to bluntly say, "Recently, many people have been saying that if YT could really control the company, even if it had half of the control, and become a co CEO, FF might have succeeded long ago."
So, Jia Yueting announced that he will propose to the company to appoint him and Matthias as co CEOs and share responsibilities.
It should be pointed out that in 2019, Jia Yueting relinquished his position as CEO, which was also a choice he had to make at that time. Because according to FF's situation at the time, Jia Yueting gave up his position as CEO and applied for personal bankruptcy reorganization to transfer his personal shareholding to a creditor trust, all in order to remove FF from Jia Yueting and increase external trust in FF, which can continue to advance subsequent financing and IPO.
Now, Jia Yueting hopes to take advantage of FF's dismal performance over the past three years to stand at the forefront and become the company's CEO again. For the next development, Jia Yueting proposed three directions: first, to maintain the company's listing status, and second, to accelerate the financing process.
The third direction is the FF plan to open up the complete technology and value chain accumulated over the past decade to the entire industry. "This will be an important part of FF's next stage strategy," Jia Yueting said, "hoping to become FF's new value realization and revenue opportunity."
In addition, Jia Yueting also announced, "I have made a indecisive decision that is not in line with my personal pursuit. I will start commercializing my personal IP and make some money as soon as possible. Part of it will be used to pay off debts and the other part will be used to save the company, to supplement car manufacturing. I will strive to support FF's basic operations and give investors and shareholders confidence."
This may mean that Jia Yueting will also embark on his own live streaming sales career. Because currently, live streaming sales are the most efficient way to monetize video traffic, and previously, Luo Yonghao also verified the feasibility of this path. However, for Jia Yueting, it is not easy to replicate this path, especially as he is far away in the United States. How to gain the trust of domestic consumers is the first problem he needs to solve.
Live streaming sales to repay debts, there is no such easy thing in the world. There are millions of internet celebrities, and they can easily turn over. To save FF, Gibbs must first save himself.