2021年做空法拉利FF报告

October 7, 2021Faraday FutureFaraday Future(FFIE)(FFIE) © 2021 J Capital Research Limited. All rights reserved. This report or any portion hereof may not be reprinted, sold orredistributed without the written consent of J Capital. Use of this publication by authorized users is subject to the J CapitalAuthorized User Content Agreement available here. Use of this publication by non-authorized individuals is subject to the JCapital Non-Authorized User Content Agreement available here.Anne Stevenson-Yanganne@jcapitalresearch.com+1 860 391 6094Move Over Lordstown:There’s a New EV Scam in TownWe don't think Faraday Future (FFIE), an EV SPAC, will ever sell a car. So far, it'snothing but a bucket to collect money from U.S. investors and pour it into theblack hole of debt created by its founder, China's best-known securities fraudster, JiaYueting.After eight years in business, FFIE has failed to deliver a car and is yet again say-ing “next year.” The company has reneged on promises to build factories in fivelocalities in the U.S. and China and repeatedly delayed the sixth. FFIE is being suedby dozens of unpaid suppliers and has failed to disclose that assets in China haveg The industrialpark where FFIE’sDeqing “factory” islocated. Photo by JCapital researcherOctober 7, 2021Faraday Future(FFIE)UntrustworthyUntrustworthy••Founder Jia Yueting hasFounder Jia Yueting hasan undisputed history ofan undisputed history ofsecurities fraudsecurities fraud• He also has an unbroken• He also has an unbrokenstreak of spectacularstreak of spectacularfailuresfailures• Jia has significant• Jia has significantcontrol over the company,control over the company,directly and throughdirectly and throughproxies.proxies.“EV ”“EV ”EEmbezzlementmbezzlement No VehicleNo Vehicle• Five factories promised• Five factories promisedand abandoned. One delayed.and abandoned. One delayed.• Technology not ready for• Technology not ready formass productionmass production• Fake reservations• Fake reservations• FF-91 unlikely to find a• FF-91 unlikely to find amarket.market.ShareholdersShareholderspoised to sell outpoised to sell out• Evergrande 20.5%• Evergrande 20.5%• Vendor Trust 6.1%• Vendor Trust 6.1%• FF Global Partners• FF Global Partners(Legacy FF) 37.4%(Legacy FF) 37.4% 2See page 2 of the Q&A March 15, 2021, filed March 19, 2021: https://investors.ff.com/static-files/97a9b0f1-3e0b-493e-b639-mystery booker, who was apparently ready to spendwell over $1 bln on FFIE cars, may be an “affiliate.”They fail to say who it was. In H1 2021, despite theupcoming SPAC merger, FFIE took in just $144,000in new customer deposits.Massive dilution is coming down the pike. Lega-cy FF shareholders will receive up to 25 mln FFIEshares based on a limited upward movement inFFIE’s share price alone. Over half of those sharesare earmarked for Evergrande. SPAC sponsor PSAChad 23.7 mln warrants as of June.Just last August, despite having very recently raiseda significant amount of cash, FFIE continued toissue promissory notes convertible to 4.4 mln newshares with a conversion value equivalent to 130%of the outstanding principal. In an S-1/A just issuedon October 4, FFIE showed that it is still raisingmoney, with some of the new debt costing 14%.Adding insult to injury, FFIE’s own filings statedeep in the small print that it expects to need anadditional $1.4 bln in funding by 2024 to achieveits financial targets.3That is likely to dilute equityholders.Meanwhile, FFIE may soon move U.S. investormoney into private hands. The pro forma combinedbalance sheet shows $127.8 mln in notes payable re-Options, earn-out shares, warrants (,000)Source25,000.0S1/A p 113,337.5S1/A p 14923,572.1S1/A p 62220,277.5S1/A p F-27670.1S-1/A p 853,874.2S-1/A p 13410,199.0S-1/A p F-9233,592.9 been frozen by courts. And Jia appears to be run-ning the company behind the scenes.Given the current bubble environment, FFIE nev-ertheless managed to raise about $1 bln from U.S.investors via PIPEs and SPAC merger in July. Nowit promises to restart its abandoned factory in Han-ford, California and mass-produce cars in just sevenmonths. We doubt that timeline will hold: three re-cent visits to the factory showed little activity, andcompany formers told us there are still engineeringproblems to work out.FFIE is the malformed lovechild of the imperiledChinese real estate developer Evergrande (3333 HK)and Jia, China’s fugitive default king. We expectEvergrande, which owns 20.5% of this company andstands to gain more equity, to sell off its shares assoon as the lockup period ends, in January 2022 ifnot, quietly, before that.In January 2021, the company claimed it had 14,000reservations for the car—until one week after Hin-denburg published its findings that Lordstown’s or-ders were faked.1Without explanation, after March19, FFIE no longer made reference to the numberof reservations.2In fact, these reservations--78%of which were from a single company—had beenconverted in 2020 to a note payable earning 8%interest