Shares of electric vehicle maker Faraday Future Intelligent Electric (FFAI) dropped nearly 7% on Monday following the release of its second-quarter earnings, coming just a day after the company unveiled a multibillion-dollar cryptocurrency reserve plan.
FFAI briefly rose at the market open but ended the day at $2.58, erasing a week’s worth of gains, according to Google Finance.
The sell-off followed the company’s announcement that it plans to acquire “tens of billions” in cryptocurrency, starting with a $30 million purchase for its strategic reserve.
As part of its crypto initiative, Faraday Future launched the C10 Treasury, a portfolio of the top 10 cryptocurrencies by market capitalization, excluding stablecoins. Bitcoin makes up 50% of the fund, with Ethereum second at 23.7%. The company also plans to introduce an ETF tied to the C10 Treasury.
The broader strategy envisions purchasing between $500 million and $1 billion worth of top 10 cryptocurrencies for its strategic reserve.
Second-quarter earnings fall short of expectations
Faraday Future’s shares fell as the company reported a muted performance for the second quarter, though management expressed optimism for the remainder of the year.
The EV maker posted a net loss of $48.1 million from operations, slightly narrower than the $50.6 million loss recorded in the same quarter last year. Total operating expenses fell 29% year-over-year to $21.3 million.
Management emphasized continued financial discipline while sticking to the planned rollout of its electric vehicles.
“In the second quarter, we achieved several notable capital markets milestones and continued to strengthen our operating efficiencies and cost control measures,” said Matthias Aydt, Global Co-CEO of Faraday Future.
The company also announced that its stock has been added to the Russell 3000 Index, which tracks the 3,000 largest publicly traded companies in the U.S.
Strong demand from institutional investors persists
Despite a short-term decline in Bitcoin and the broader market, publicly traded crypto treasury companies have continued to grow their strategic crypto reserves.
Strategy, the largest corporate Bitcoin holder, acquired 430 BTC valued at $51.4 million last week.
At the same time, BitMine Immersion Technologies, the largest corporate holder of Ether, increased its holdings to over $6.6 billion, buying more than 370,000 ETH in the past week.
