Shares of Faraday Future Intelligent Electric, the electric vehicle manufacturer, fell by about 7% on Monday, following the announcement of its second quarter earnings results, just one day after revealing a plan to create a massive strategic reserve of cryptocurrencies.
Despite a strong start with the market opening, shares closed at $2.58, thus losing a full week's gains, according to Google Finance data.
Cryptocurrency plan
The company announced that it plans to purchase tens of billions in digital currencies as part of a strategic reserve, having already invested $30 million in crypto assets.
It also launched a new fund called Treasury 10, which includes the top ten cryptocurrencies by market capitalization (excluding stablecoins), with Bitcoin making up 50% of the portfolio, followed by Ethereum at 23.7%.
Faraday Future is also seeking to launch an exchange-traded fund (ETF) for this product, in addition to plans to invest between $500 million and $1 billion in the top ten cryptocurrencies to bolster its reserves.
Second quarter results
In conjunction with these plans, the company announced modest financial results for the second quarter, recording an operating loss of $48.1 million, compared to $50.6 million during the same period last year. Operating expenses also decreased by 29% to $21.3 million.
Despite the losses, management expressed optimism for the second half of the year, reaffirming its commitment to financial discipline and continuing to roll out its vehicles on schedule. Matthias Aydt, co-CEO, stated:
"We achieved significant milestones in the capital markets during the second quarter, continued to enhance operational efficiency, and reduce costs."
The company also announced the inclusion of its stock in the Russell 3000 Index, which includes the largest 3,000 publicly traded American companies.
Continued institutional momentum in the crypto market
Despite recent price pressures on Bitcoin and the market as a whole, institutional players continued to bolster their reserves of digital currencies:
MicroStrategy added 430 Bitcoin worth $51.4 million last week.
BitMine Immersion Technologies, the largest institutional holder of Ethereum, raised its holdings to $6.6 billion after purchasing over 370,000 Ethereum.
