By Claudia Assis, MarketWatch
Electric-car maker Fisker Inc. is hoping to ride twin waves of investor interest in electric vehicles and blank-check companies to get its first vehicles onto roads in a couple of years.
Fisker and Spartan Energy Acquisition Corp. /zigman2/quotes/209924856/composite SPAQ -0.08% , a special purpose acquisition corporation, or blank-check company backed by Apollo Global Management Inc. /zigman2/quotes/203829595/composite APO +0.41% announced their merger on Monday. The deal valued Fisker at $2.9 billion and it is expected to close in the fourth quarter.
Fisker said it had a net loss attributable to shareholders of $10.4 million in 2019, compared with a net loss of $4.7 million in 2018. It had $1.9 million in cash and cash equivalents last year.
Fisker’s IPO is “timely” as it is taking advantage of Tesla Inc. /zigman2/quotes/203558040/composite TSLA -2.48% share rally “and the PR blitz” of electric-truck maker Nikola Corp. /zigman2/quotes/208704275/composite NKLA +1.16% , said David Kudla, CEO of Mainstay Capital Management.
“Going public through a SPAC allows the company to raise proceeds in a timely and cost efficient manner,” he said. “Whether or not Fisker can become profitable and cash flow positive with a $40,000 EV SUV remains to be seen.”
SPACs are companies that don’t have an actual business until they acquire one or more.
Here are five things to know about Fisker:
‘Sky high’ investor interest in clean energy and blank-check companies
Fisker's journey to becoming a public company comes on the heels of the success of Nikola, which also came to public markets through a SPAC. Nikola shares have gained 410% this year.
Others taking a similar route include electric-truck maker Hyliion Inc., which in late June announced a merger with Tortoise Acquisition Corp. /zigman2/quotes/211349827/composite SHLL -1.73% , with the newly combined company remaining listed on the New York Stock Exchange under a new ticker.
Besides the heightened interest in blank-check companies, there’s “sky high” sentiment for clean energy, analysts at Evercore ISI said in a recent note.
That’s evidenced by Tesla Inc.’s meteoric share rise and almost equal rallies for shares of other EV and EV-adjacent companies, such as China’s Nio Inc. /zigman2/quotes/204905836/composite NIO -3.03% and Plug Power Inc. /zigman2/quotes/205453512/composite PLUG +5.13% , as well as the drumbeat of automobile SPACs, they said.
“What’s clear is EV capital is now abundant,” the analysts said.
Before Fisker, there was Karma, and before that there was Fisker too
Fisker had an earlier life as privately held Fisker Automotive, which went bankrupt in 2013 after six years in business. The company’s assets were acquired by Chinese auto parts maker Wanxiang Group in 2014. Wanxiang also owned battery maker A123 Systems, which supplied batteries to Fisker. A123 Systems also went bankrupt and hastened the demise of the old Fisker.
Wanxiang relaunched and renamed the company Karma Automotive, the name of the former Fisker’s first and only car, a luxury plug-in hybrid that was first marketed in 2011. Karma has attempted to gain some traction in the years since, and it has revamped and renamed the car the Revero.
The founder of Fisker Automotive, legendary Danish designer Henrik Fisker, had resigned from the company amid board infighting just before the bankruptcy. But he retained some brand rights and went on to found Fisker Inc.