Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE) shares are slumping in the premarket session on Tuesday.

Yesterday, the California-based firm announced a reverse stock split of the company's common stock.

The reverse stock split proposal includes a proposed range between 1-for-2 and 1-for-40 shares of outstanding common stock and a corresponding reduction in the total number of shares of common stock the company is authorized to issue.

The company's share price fell below Nasdaq's minimum bid price requirement for listed companies for 30 consecutive trading days last December, resulting in a deficiency notice from Nasdaq. Subsequently, the company did not timely file its 2023 Annual Report on Form 10-K, and its stock price dropped below $0.10 for ten consecutive trading days.

This resulted in another deficiency notice and Nasdaq's determination to delist FF's securities.

Faraday Future also announced the appointment of Macias Gini & O'Connell LLP (MGO) as its independent auditor.

MGO succeeds Mazars USA LLP, which was the company's independent registered public accounting firm until May 31, 2024.

"The company has taken actions to regain compliance, including filing its 2023 Annual Report on Form 10-K at the end of May, engaging a new independent auditor, filing a preliminary proxy statement with a proposal to effect a reverse stock split, and committing to file its first quarter Form 10-Q no later than the end of July," Faraday Future said in a press release.

In addition, the company intends to file its second quarter Form 10-Q timely.

The proposed reverse stock split is intended to increase the market price of the common stock to mitigate the risk of being delisted.

Price Action: FFIE shares are trading lower by 20.5% to $0.2591 premarket at last check Tuesday.

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