SPAC Boom Propels Electric Carmakers to Public Markets
Bloomberg 1/22/2021 Ed Ludlow and Crystal Tse
(Bloomberg) Until June last year, Tesla Inc. was the only dedicated electric carmaker based in the U.S. on the stock market. Then special purpose acquisition companies took over Wall Street.
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SPACs, or blank-check companies, are shell vehicles that raise money to take a private company public via a reverse merger. Unlike traditional initial public offerings, SPAC deals allow listing candidates to market financial projections to investors, a perk for earlier stage companies that have yet to prove their business model.
Electric-vehicle companies, many of which are yet to launch commercial products, have taken advantage of that. Nikola Corp. was the first high profile one to go public via a SPAC listing, followed by others including Lordstown Motors Corp., Fisker Inc. and Canoo Inc.