Connect with us

Business

Troubled EV maker Fisker closing Manhattan Beach headquarters

Published

on

Troubled EV maker Fisker closing Manhattan Beach headquarters

In an effort to stave off bankruptcy, electric-vehicle maker Fisker Inc. is closing its Manhattan Beach headquarters and has secured a $3.5-million lifeline as it continues to explore an acquisition or other strategic alternative.

The troubled company, which had about 300 employees in the 72,000-square-foot offices at the end of March, is moving its remaining workers to an engineering and distribution facility in La Palma in Orange County, said a person familiar with Fisker’s operations who was not authorized to comment.

In all, the company had roughly 1,135 employees as of mid-April, following an announced 15% cut to its workforce.

Fisker has been attempting to avoid bankruptcy since March, when it announced that talks over a strategic alliance with a major automaker had ended, squelching a deal that would have given it $150 million in new financing.

Advertisement

That caused its shares to collapse to pennies, prompting the New York Stock Exchange to delist the stock, which violated another debt agreement the company struck with an investor last year, according to a regulatory filing.

A major automaker, said to be Nissan, was reportedly in talks to invest in Fisker. Nissan was considering making the Fisker Alaska truck at a U.S. plant — a deal that would come with a $400-million investment, Reuters first reported. Fisker did not confirm the reports.

Fisker announced this week that it secured a $3.5 million short-term loan, as it continues to operate and sell its midsize Ocean SUV. The note is due June 24 and has the potential to increase to $7.5 million.

The Ocean, a competitor to Tesla’s Model Y, was released last year to mixed reviews; some praised its build and styling, but the car has been plagued by software glitches.

The National Highway Traffic Safety Administration has four investigations into the vehicle, including one opened this month after complaints that the SUV’s automatic emergency braking system randomly triggered.

Advertisement

Other probes are looking into reports that a door on the Ocean will not open and complaints about a loss of braking performance. The company has said it is working with the regulator.

Fisker said this week that it had added three dealers to its networks in California and New Jersey, which it began building after a plan to sell direct to consumers — like Tesla does — didn’t pan out. It also announced additional price cuts on some Ocean models.

In March, Fisker slashed the price on its entire lineup of 2023 Oceans by more than 30%. The company also said that it had paused production at its contract manufacturing plant in Austria, which produced about 10,200 Oceans last year.

Fisker was founded in 2016 by noted car designer Henrik Fisker, who has said the Ocean was inspired by California. The SUV features a full-length solar roof, an interior composed of “vegan” recycled plastic and a drop-down rear window that can fit a surf board.

Fisker is not the only startup that has been struggling amid a slowdown in the domestic market for electric vehicles and a rise in interest rates.

Advertisement

Rivian Automotive, an Irvine maker of electric trucks, has informed state officials it will lay off more than 120 employees beginning in June. In February, the company announced it was cutting 10% of its workforce. The company’s shares have lost more than half of their value since last year.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

How Santa Clara chipmaker Nvidia became one of the world's most valuable companies in the AI boom

Published

on

How Santa Clara chipmaker Nvidia became one of the world's most valuable companies in the AI boom

For more than a decade, with only a few interruptions, Apple held the title of the world’s most valuable company, becoming the first to top $3 trillion in market capitalization — mostly due to the iPhone, a device millions of investors use daily.

Recently, Apple was overtaken by Microsoft, and this week there was briefly a new king of Wall Street — once again a Bay Area company: Nvidia, which makes semiconductors in high demand for artificial intelligence applications. It’s the hottest stock around and the company has a market cap that tops $3.2 trillion.

Here’s what to know about the world’s leading AI chipmaker:

What role is Nvidia playing in the artificial intelligence industry?

Artificial intelligence programs are complex computer applications that rely on massive databases and processing power to produce their results. OpenAI’s ChatGPT-4, a much-talked about program released last year that generates text, is estimated to have 1.7 trillion “parameters,” or variables, about 10 times more than its 2020 predecessor — and the complexity is only growing. Nvidia makes a chip called the H100 accelerator that is able to process that data and is in high demand. This month it announced it is making an even more advanced chip.

Advertisement

Has Nvidia always made chips for artificial intelligence?

Nvidia went public in 1999 and for years was seen largely as a manufacturer of premium graphics cards sought after by gamers for their clarity in rendering high-speed visuals. The cards don’t come cheap, with Nvidia’s top-of-the-line GeForce RTX 4090 currently retailing around $1,700. But given its niche position in the industry, Nvidia stock lingered for years under $1 per share, adjusted for stock splits.

When did its fortunes improve?

During last decade’s crypto boom, its powerful chips were sought by “miners” of bitcoin, which employ computer banks to solve puzzles that reward them with cryptocurrency. The demand was so strong Nvidia launched a new chip specifically for miners as its stock surged from 87 cents in May 2016 to more than $7 in October 2018 — before the crypto bubble burst and shares fell under $4.

The fall prompted a shareholder lawsuit over accusations that the company hid how much revenue it was making on crypto-related sales. That suit is currently before the Supreme Court.

Advertisement

What happened after the collapse of the crypto boom?

Nvidia enjoyed a resurgence during the pandemic as Americans confined at home turned to their gaming computers. Its annual revenue shot up more than 50% to $16.7 billion in the fiscal year ending Jan. 31, 2021. The company’s cloud computing platform also grew as customers relied on the networks to handle the shift to remote work. Nvidia’s stock topped $19 a share in August 2022 before coming back to earth and trading below $12 later in the year as the pandemic waned.

When did the current stock surge begin?

Nvidia shares have been on a steady upswing since 2021 as the hype over artificial intelligence has become a frenzy — supported by the company’s strong sales growth. Nvidia’s revenue hit $60.9 billion in its fiscal year ending Jan. 31, 2024. Shares started the year at $48.17 and closed Tuesday at $135.58, a 180% gain that gave it a market value of about $3.34 trillion, briefly surpassing Microsoft.

Can the company keep it up?

Advertisement

Nvidia reported record fiscal fourth quarter revenue of $26 billion, up 262% from a year earlier, as demand for its chips grew beyond cloud-service providers to include consumer internet companies, governments and automotive and healthcare customers. The company’s revenue is projected to grow 44% annually in the near future, according to a FactSet survey of 60 analysts.

What other companies are benefiting from AI?

Microsoft has seen its own stock gain about 20% this year. That’s largely due to its partnership with OpenAI. Microsoft’s Bing browser now offers a chat function powered by Chat GPT-4 that can write emails and perform other tasks. Apple stock also hit a record high this week after it announced its Apple Intelligence platform, which will be integrated into its iPhone, iPad, and Mac lineups.

Is a lot of this just hype like crypto?

Many on Wall Street believe that artificial intelligence is in a different league than blockchain and cryptocurrency, with far more concrete applications. Advanced Micro Devices and Intel Corp. are rolling out new chips to counter Nvidia’s market dominance.

Advertisement

However, there are dissenting voices. Rob Arnott, founder of Newport Beach investment company Research Affiliates, has called Nvidia a great company but warned even last year that its stock performance is unsustainable.

“Overconfident markets paradoxically transform brilliant future business prospects into even more brilliant current stock price levels,” Arnott wrote in a research note. “Nvidia is today’s exemplar of that genre: a great company priced beyond perfection.”

Bloomberg News contributed to this report.

Advertisement
Continue Reading

Business

State board approves protections for hot workplaces

Published

on

State board approves protections for hot workplaces

Relief is on the horizon for California fast-food workers operating hot kitchen appliances, logistics workers in vast inland warehouses that lack cooling equipment and others laboring in hot indoor settings as a state agency Thursday approved new workplace protections against excessive heat.

A standards board at the California Division of Occupational Safety and Health voted unanimously to adopt safety measures that require employers to provide cooling areas and monitor workers for signs of heat illness when indoor workplaces temperatures reach or surpass 82 degrees.

If temperatures climb to 87 degrees, or workers are made to work near hot equipment, employers must take additional safety precautions by cooling the work site, allocating more breaks, rotating out workers or making other adjustments.

The new rules still must undergo a procedural legal review. If that review process is expedited the new rules could be in effect by late July or early August. Otherwise, they are likely to be in place by October.

Advertisement

Thursday’s vote marked the end of more than five years of delays in the effort to strengthen the state’s requirements for indoor working conditions. Most recently, a scheduled vote on the rules in March was cancelled after finance officials from Gov. Gavin Newsom’s administration raised last-minute concerns about the costs California prisons and other public entities would incur trying to adhere to the new rules.

In light of those concerns, the rules were amended to exclude state and local correctional facilities.

During a public comment period before the board voted, several people urged the board to pass the long-awaited measure.

Tim Shadix, legal director at Warehouse Worker, an advocacy group, said it “would be a tragedy,” if workers become sick from heat exposure this summer and hoped to see the rules in place “well before the end of summer.”

AnaStacia Nicol Wright, a policy manager at Worksafe, voiced concern about the decision to exclude correctional facilities, which employ tens of thousands of people in “archaic buildings with little protection from temperatures.”

Advertisement

Wright pressed the board should move swiftly to put pass separate protections for correctional staff and incarcerated workers.

California, in 2006, became the first state in the nation to implement heat standards for outdoor work, requiring employers to provide access to shade and water, and cool-down rests when workers need them. In high heat conditions, defined as temperatures of 95 degrees or higher, employers are required to remind workers of safe practices, encourage breaks and drinking water, and observe them for signs or symptoms of heat illness.

In 2016, the California Legislature turned its attention to indoor conditions, directing the Cal/OSHA to develop an indoor heat standard by 2019. The agency drafted a proposal mirroring the state regulations that protect outdoor workers, but the rule-making process moved slowly, blowing past the 2019 deadline.

Thursday’s vote came against the backdrop of recent shake-ups on the board that approved the rules.

Earlier this month, the Newsom administration removed worker safety expert Laura Stock and demoted David Thomas from his position as chair of the board after they criticized the 11th-hour decision to delay the vote in March.

Advertisement

Head of the California Labor Federation Lorena Gonzalez criticized the move, saying neither she nor other labor leaders had been consulted in advance.

“Obviously, we are disappointed. We think it’s a big loss for the board,” Gonzalez said. “We hope it’s not retribution for standing up for workers on heat standards.”

In recent years, as the state has experienced record-breaking heat waves, cooks, warehouse workers and delivery drivers have repeatedly raised concerns about high temperatures.

Victor Ramirez, who has worked in various warehouses in the Inland Empire over the past two decades, most recently at a facility in Fontana operated by Menasha Packaging, said many of the warehouses he’s worked in did not have air conditioning or fans. In recent years, fans and air conditioning have become more common, but they “aren’t very effective and those warehouses still feel hot,” he said.

“We need this rule in place right now. Workers need protections, they need training so they know the dangers of the job and working in heat,” Ramirez said. “It’s a basic right to work in a safe environment.”

Advertisement
Continue Reading

Business

MoviePass secures investment from Comcast-backed venture firm amid comeback attempt

Published

on

MoviePass secures investment from Comcast-backed venture firm amid comeback attempt

MoviePass, the infamous cinema subscription service that crashed and burned in 2020, has secured a new investor amid an ambitious comeback attempt.

The New York-based company announced Thursday that it had landed an investment from Forecast Labs, a venture group owned by Comcast. MoviePass did not disclose the amount invested or other financial terms.

The plan is for Forecast Labs to grow MoviePass’ subscriber base through TV advertising.

“Today’s investment will accelerate our mission to bring new technology and innovation to the film community that will spur growth and drive higher traffic to theaters,” Stacy Spikes, chief executive and co-founder of MoviePass, said in a statement.

“We are also continuing to invest in the development of our cinematic marketplace so that studios and partner theaters can see maximum value by engaging directly with movie fans on the platform.”

Advertisement

Arjun Kapur, managing partner at Forecast Labs, added in a statement that the venture firm sees “tremendous value” in the new MoviePass and is confident in its ability to “enhance … the brand.”

The investor announcement comes more than four years after MoviePass filed for bankruptcy due to a lack of funding needed to sustain its perplexing business model.

The service — which offered subscribers access to screenings at various movie theaters for a monthly fee — began to unravel after Helios and Matheson Analytics Inc. purchased a majority stake in the company and dramatically dropped the monthly subscription price to $9.95 instead of $30 to $50.

Despite courting fame and millions of customers, the new model proved too good to be true, tanking MoviePass and its owner’s stock value in about three years. The fall of MoviePass spurred shareholder lawsuits and an investigation by the New York attorney general’s office.

Last month, HBO released a documentary chronicling the meteoric rise and spectacular demise of MoviePass.

Advertisement

Spikes revived the company in 2022 with the help of a crypto-focused gaming software and investment firm and has been mounting a comeback. Last year, the entrepreneur told The Times that he had the support of 25% of exhibitors — “totally different from before” — and seemed optimistic that other theaters would follow.

“The $10 price point was … just dumb,” Spikes said at the time.

“There’s no way to offer a subscription plan where you don’t control the cost and you make it cheaper than a movie ticket. … Just don’t set ‘unlimited’ at a $10 price point. Voilà, you’ve avoided disaster.”

Times staff writer Stacy Perman contributed to this report.

Advertisement
Continue Reading

Trending