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 . SPAQ , -2.84%, a special purpose acquisition corporation, or blank-check company backed by Apollo Global Management Inc. APO, -1.15% 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 is “timely” as it is taking advantage of Tesla Inc . TSLA , -3.11% share rally “and the PR blitz” of electric-truck maker Nikola Corp. NKLA, -2.88%, 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. SHLL, -0.94%, with the newly combined company remaining listed on the New York Stock Exchange under a new ticker.
Outside the car sector, online sports-gambling company DraftKings Inc . DKNG , -1.54% also went public through a merger with a blank-check company.