Author Bio
Rekha Khandelwal, CFA, is a long-term investor with a special focus on energy stocks. Rekha holds a master s in finance and has worked as a financial consultant. When she isn t writing, she can be found traveling to a new city or country.
The euphoria surrounding electric vehicles (EVs) has boiled over from vehicle manufacturers to EV charging stocks as well.
Blink Charging (NASDAQ:BLNK) stock surged around 2,000% last year. Similarly, shares of Switchback Energy Acquisition Corporation, an energy sector-focused special purpose acquisition company (SPAC), surged 220% in 2020 after it announced a merger with
ChargePoint (NYSE:CHPT) in September. The merger was completed in February.
Are Electric Vehicle Charging Stocks Overhyped?
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EV charging keeps VC happy but investors should beware
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The EV Charging Problem
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Seyfarth Synopsis:
Special Purpose Acquisition Company (“SPAC”) transactions have dramatically increased since the start of 2020, bringing with them risk of securities litigation.
2020 has been characterized as the “Year of the SPAC,” and there is no doubt that SPAC transactions are on the rise.[1] One industry tracker reports that in 2020 there were 248 SPAC initial public offerings (“IPOs”) raising over $83 billion (as compared to 59 SPAC IPOs raising approximately $13.6 billion in 2019).[2] This trend is expected to continue in 2021 with 189 SPAC IPO transactions this year at the time of writing.[3]
We expect this rise in SPAC transactions to be accompanied by the continued filing of securities suits in the coming months and years.[4] Much of the litigation will be no different than typical disclosure-related suits that might follow any public company disclosure, but certain unique aspects of the SPAC structure could create additional litigation risks.