Despite having never manufactured a single production model, Fisker Inc. is a company reportedly worth billions. On Thursday, the prospective automaker indicated that it was ready to see how much more it could get via an announcement that it had officially completed its business combination Spartan Energy Acquisition Corp — a special purpose acquisition company — and was ready to be publicly traded.
Better call your broker.
Listen, if we could explain to you why technology firms with no product lineups or revenue sources are eligible to receive cash enemas from the stock market, we absolutely would. But the amount of mental gymnastics required to rationalize an answer has surpassed what your author can entertain without risking his own sanity. Special purpose acquisition companies (aka SPACs or “blank check” firms) have exploded in popularity and allowed dozens of businesses going public to rake it in via reverse-mergers this year. Whether it’s economic voodoo or sheer madness, it has become the status quo for IPOs seeking to raise insane amounts of money.
This includes the miraculous Nikola IPO we witnessed before the subsequent SEC investigation into whether or not it misled investors. Ironic, considering one of the biggest advantages of partnering with a SPAC is to avoid the Securities and Exchange Commission’s regulatory rigamarole by merging with a shell company that’s already public.
Fisker is essentially the second coming of Fisker Automotive, which went bankrupt in 2014 after selling a few thousand luxury EVs, and is looking to reenter the automotive marketplace with as much financial backing as possible. Like most electric startups, any vehicles currently in its roster are mock-ups of what it eventually hopes to produce. Spartan Energy Acquisition Corp is funded by private equity and only exists to scoop up businesses. A common stock and public warrants are expected to commence trading on the New York Stock Exchange under the ticker symbols FSR and FSR WS, respectively.
“All the external pieces are now in place to execute our unique, asset-light business strategy, with today’s funding and the strategic cooperation announced with Magna on Oct. 15,” Fisker Chairman and Chief Executive Officer, Henrik Fisker, proclaimed. “We can now fully turn our attention to developing and launching the revolutionary, all-electric Fisker Ocean into the heart of the midsize SUV market, expected to commence in Q4 2022. We appreciate the confidence from all our shareholders and intend to deliver on our stated goals.”
The Fisker Ocean will be priced at a claimed $37,499 when it arrives, making it less than half as expensive as the old Fisker Karma. But we’re not convinced of anything until we see the brand building them and holding its own on the market for a while. Too many EV startups have fallen by the wayside already (e.g. Faraday Future, LeEco, Detroit Electric, Dyson, Bright Automotive, and more) despite having mountains of cash at their disposal.
[Image: Fisker Inc.]