(Bloomberg) – The appeal of electric vehicles increases the shares of blank check companies, most recently Spartan Energy Acquisition Corp., supported by Apollo Global Management.
Spartan Energy became a sensation overnight on Thursday after Reuters reported that it was waging a bidding war for automaker Fisker Inc. Spartan stock has now increased up to 71% in two trading sessions, increasing its market value to over $ 1 billion for the first time, reflecting the meteoric rise of Nikola Corp. contrary.
Nikola, the manufacturer of tractor units, was listed on Nasdaq after a reverse merger with a special purpose vehicle (SPAC) last month. The Spartan Energy ticker symbol is SPAQ.
It is not uncommon for a blank check company to gather at the announcement of a business combination. A SPAC is practically a capital raising instrument that goes through an IPO for the express purpose of buying an existing company. Lately, they have been a popular way for private companies to go public, avoid a lengthy registration process, and sell stocks.
After a SPAC has raised money through its IPO, this money is transferred to a private company as part of a merger. So when a business goal is identified, investors often offer SPAC shares to unlock the value when they are united.
Aside from the early exuberance over Spartan Energy, it is unclear to what extent a case of false identity could come into play. Fisker is the second attempt by seasoned car designer Henrik Fisker to found an electric vehicle company to compete with companies like Tesla Inc. His first company, Fisker Automotive, filed for bankruptcy in 2013 and cost US taxpayers $ 139 million. The following year, this company was taken over by the Chinese auto parts manufacturer Wanxiang Group and renamed Karma Automotive.
Fisker announced earlier this week that the company raised $ 50 million from Moore Strategic Ventures, the private investment vehicle of hedge fund manager Louis Bacon. The money will flow into the engineering of the SUV, which is to be introduced in 2022.
(Adds the third paragraph detailing SPACs and updates the fifth paragraph explaining Louis Bacon’s support.)
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