Fisker Goes Public With Spartan Energy SPAC
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.
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.]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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"The amount of mental gymnastics required to rationalize an answer has surpassed what your author can entertain without risking his own sanity." Your skepticism of SPACs and other "financial engineering" products is warranted and appreciated. Keep up the good work.
If Fisker actually manages to (have Magna) build this thing at the promised price, it will be pretty rad. Especially if they come through on the innovative and cheap lease terms they are promising. But I have a feeling the mainstream electric SUV future will, for the next several years, consist of existing companies promising $30k cars on every corner...but actually delivering $50k+ cars in small quantities. Ford, VW, Volvo, Tesla.