Faraday Future: A Car Company Or a Hobby
This is going to be a fun one. Faraday Future(FFAI) is putatively a car manufacturer, or , as they call it a “global shared intelligent electric mobility ecosystem company.” They have released a single model, the FF 91, of which they have sold 16 since its 2023 introduction. Yes, just 16! Total! They do have plans to introduce the FX Super One at some future point, and they claim to have over 10,000 non-binding reservations for it. But, as of right now, it would appear Faraday Future’s main business is issuing press releases and raising money from investors.
Crypto Flywheel Of Misfortune
Oh, and Crypto, because, why not? Which is what brings us here- Faraday Future announced a spinoff of its Crypto business. I mean its Crypto Flywheel business, whatever that is. Of course, it’s not going to be your standard spinoff.
preparing to spin off its crypto flywheel assets (the “Spin-Off”) into a separate existing listed company.
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The Spin-Off plan aims to establish two independent listed systems—FFAI and a new company focusing on the Crypto Flywheel—that will operate independently while forming strategic synergies.
C10 & Crypto will be driven by its three engines of core businesses, including C10 Treasury, with the goal of accelerating the realization of its Web3 strategic vision and unlocking its full potential. As presented at the Company’s August 16 event, this move is expected to further advance the construction of an “independently operated, mutually empowered” Web2+Web3 dual-engine growth system to maximize stockholder value.
“Separating and listing the Crypto & C10 and crypto asset businesses marks an important turning point in the Company’s development,” said YT Jia, Founder and Global Co-CEO of FF. “We are establishing a second growth engine while ensuring that our core EAI EV Flywheel remains focused, accelerating product delivery and market expansion.”
Let’s try to break that down. It looks like they plan to spin off the Crypto assets and merge them into an existing company, presumably a shell. There is not talk about distributing shares, so Faraday will likely continue to hold most of the company, diluting as it raises additional capital. The companies will be “mutually empowered,” which might impress us if we knew what that meant. I also note that the EV business is also a “Flywheel”, I guess that’s just another word for money losing division?
Introducing CXC10: Faraday Future’s Buzzword Titan in the Making?
Just 2 days after the initial announcement, the company touted the incredible spinoff plan in a followup press release,
The second independently listed company, which I will refer to as CXC10, will raise its own capital and operate independently. The goal is for CXC10 to become one of the leading Web3 listed companies on the U.S. stock market. The Board has approved the spin-off strategy. The Company is working closely with investment banks, potential strategic investors, and law firms. Additional detailed progress and plans will be announced at the September 19 annual stockholder event.
This spin-off aims to address two key concerns from stockholders:
First, as CXC10 would raise capital independently, the C10 Treasury would no longer dilute FFAI stock.
Second, each team could focus more sharply. The FFAI team will mainly concentrate on its core businesses, especially the delivery progress of FF and FX products.
At the same time, if the financial reporting includes the consolidation of the CXC10’s financial statements, the core value of CXC10 would, at least initially, be reflected within FFAI’s financial statements. This will ensure that the Dual Flywheel can run independently while still empowering each other, maximizing stockholder value.
So we have a name now, CXC10, which really rolls off the tongue. the goal is to be a “leading Web3 listed company”, whatever that is. And they will have a ton more to share in just a few days at their investor event on September 19.
A Long Road of Checkered Flags For YT Jia
Faraday Co-CEO YT Jia(also known as Jia Yueting, has a trail of allegations of dishonest financial behavior, bankruptcies, massive debt, and failed companies across both China and the United States. It would appear to be difficult to find anyone who has invested with him and has not lost money. You won’t be any different. Drive, don’t run away from this stock.
Disclosure: The author holds no shares of any stock mentioned.