Shares of Faraday Future Intelligent Electric (FFAI), an electric vehicle manufacturer, slid nearly 7% on Monday after releasing its second-quarter financial results. The stock drop occurred shortly after the company announced an ambitious plan to build a multi-billion-dollar crypto reserve.
Morning trading saw a temporary surge in FFAI shares, but the market closed with the stock at $2.58, wiping out gains accumulated over the previous week, as reported by Google Finance.
The decline followed the revelation that Faraday Future purchased $30 million in crypto assets for its strategic reserve and plans to acquire cryptocurrency valued in the tens of billions eventually.
Faraday Future introduced its C10 Treasury, a diversified basket comprising the top 10 cryptocurrencies by market cap, excluding stablecoins. Bitcoin makes up 50% of the fund, with Ethereum second at 23.7%. The company also intends to offer an exchange-traded fund (ETF) based on this portfolio.
As part of this strategy, Faraday Future aims to invest between $500 million and $1 billion in leading cryptocurrencies to bolster its strategic reserve.
Faraday Future’s stock declined nearly 7% following the announcement of its Q2 earnings. Source: Google Finance
Q2 Earnings Show Mixed Results
Faraday Future’s subdued second-quarter earnings report detailed a net loss of $48.1 million from operations, an improvement compared to the $50.6 million loss in the same quarter last year. Total operating expenses were reduced by 29% to $21.3 million.
Management expressed confidence in maintaining financial discipline and progressing with scheduled electric vehicle launches throughout the remainder of the year.
Matthias Aydt, Global Co-CEO, stated, “In Q2, we reached significant capital markets milestones and continued to enhance operational efficiencies and cost controls.” The company also disclosed its addition to the Russell 3000 Index, representing the 3,000 largest US-listed companies.
Strong Institutional Interest in Crypto Reserves
Amid a brief Bitcoin price decline and a cooling broader market, institutional crypto treasury holders continued expanding their digital asset reserves.
For instance, Strategy, reputed as the largest corporate Bitcoin holder, recently acquired 430 BTC worth $51.4 million. In parallel, BitMine Immersion Technologies, the largest corporate Ether holder, boosted its ETH assets by over 370,000 tokens, reaching a valuation exceeding $6.6 billion.
These developments indicate robust institutional demand for strategic crypto allocation, including that of Faraday Future.
