Two initial public offerings (IPOs) out Wednesday got a lot of attention, while a third did not. Both Palantir Technologies Inc. (NYSE: PLTR) and Asana Inc. (NYSE: ASAN) posted solid first-day jumps, up 34% and 37%, respectively. Both were direct listings.
Also on Wednesday, Velodyne Lidar Inc. (NASDAQ: VLDR), a tech firm that makes lidar (light detection and ranging, sometimes called laser) sensors for autonomous vehicles and drones, came public courtesy of Graf Industrial, a special purchase acquisition company (SPAC, or blank-check company) formed in April. The stock opened at around $25 and sank nearly 25% to close its first trading day at $18.69.
In the green technology space, direct listings and traditional IPOs seem to have taken a back seat to reverse mergers with SPACs. The timeline is roughly this: the SPAC raises money with an IPO for the sole purpose of acquiring another company. Then the SPAC finds a startup that it can acquire and take public. It sets up the deal and executes the IPO, and, finally, changes its name (hence the “reverse”) to the name of the company that it acquired a few months earlier.
It is likely that the current issues surrounding another green tech auto company that came public through a SPAC is partly responsible for Velodyne’s first-day tumble. Electric/fuel-cell truck maker Nikola Corp. (NASDAQ: NKLA) has been under terrific pressure following a scathing short seller report released a few weeks ago.
It is equally likely, however, that the run-up in the pre-IPO share price (Graf’s IPO priced at $10 a share) reflects some front-running and profit-taking at Velodyne’s IPO.
On Thursday, another reverse merger was expected to take place, but a last-minute dispute over how the company’s board is organized delayed the IPO. Hyliion is coming public in a reverse merger with Tortoise Acquisition Corp. (NASDAQ: SHLL). Hyliion makes electric drive trains for heavy trucks and is considered a competitor to both Nikola and Tesla Inc. (NASDAQ: TSLA), and it also may be a victim of front-running.
The SPAC, which came public at $10 in April, has traded as high as $58.66 in anticipation of the tie-up with Hyliion. The shares traded down nearly 10% Thursday at $45.10 after dropping 7% on Wednesday. Following the IPO, Tortoise will change its name to Hyliion and trade on the New York Stock Exchange (NYSE) under the ticker symbol HYLN.
Here are six more SPAC-reverse merger deals that are lined up to be completed by the end of the year. Three involve electric vehicle (EV) makers, two are energy storage companies and one is a maker of lidar equipment.
Canoo
Hennessy Capital Acquisition Corp. (NASDAQ: HCAC) has announced a reverse merger with electric vehicle maker Canoo Holdings. The automaker plans to release three vehicles with the first, a Lifestyle van, arriving in 2022, a delivery van scheduled for first shipments in 2023 and a Sport vehicle due in 2025. At the time the merger was announced, Canoo was tabbed to receive about $600 million from a private investment in public equity (PIPE) offering worth $300 million and another $300 million from the cash Hennessey put in trust following its own IPO.
Hennessey Capital’s closed at $11.13 on Thursday, up about 10% from its April IPO price of $10 per share. Once the offering is completed, Hennessey will change its name to Canoo and shares will trade on the Nasdaq under the CNOO ticker symbol.
24/7 Wall St.Lordstown Motors
DiamondPeak Holdings Corp. (NASDAQ: DPHC) is merging with electric vehicle maker Lordstown Motors Corp. Lordstown has attracted some attention since its founding last year for its purchase of the former GM plant in Lordstown, Ohio, and for its foray into the electric pickup scrum. At a PIPE price of $10 a share, the company is valued at $1.6 billion, and the reverse merger is looking to raise about $675 million in fresh cash.
DiamondPeak shares traded at $24.97 most recently, more than double the $10 IPO price. The company will change its name to Lordstown Motors and trade on the Nasdaq under the ticker symbol RIDE.
Fisker
Spartan Energy Acquisition Corp. (NYSE: SPAQ) has announced a merger with Fisker, the eponymous electric vehicle company founded by designer and builder Henrik Fisker, who founded Fisker Automotive in 2007. Spartan Energy is backed by Apollo Global Management Inc. (NYSE: APO) and has been publicly traded since October of 2018. The reverse merger values Fisker at around $2.9 billion.
Shares of Spartan Energy last traded just above $15, about 50% higher than the $10 IPO price. Following the July announcement of the combination with Fisker, Spartan’s shares touched a 52-week high of $21.60. Spartan will change its name to Fisker and trade on the NYSE. No ticker symbol has been announced yet.
Luminar Technologies
Gores Metropoulos Inc. (NASDAQ: GMHI) has agreed to a reverse merger with Luminar Technologies, another lidar technology firm aimed at the autonomous vehicle market. Luminar has raised $420 million in venture funding since its founding in 2012, and Gores Metropoulos led an August round that raised $170 million. Luminar will have an estimated value of around $2.9 billion and receive $400 million when the combination with Gores is completed.
The blank-check company’s stock closed at $10.85, up around 10% from its $10 March 2019 IPO price. Following the IPO, Gores will change its name to Luminar Technologies and trade on the Nasdaq under the ticker symbol LAZR.
QuantumScape
Kensington Capital Acquisition Corp. (NASDAQ: KCAC) has agreed to combine with “next-generation” battery maker QuantumScape. The battery maker has received $300 million in capital from Volkswagen, which plans to use QuantumScape batteries in is electric vehicles. The deal with Kensington values the company at around $3.3 billion.
Kensington stock closed at $16.65, well off its post-IPO high of $25.75 following the announcement of the deal with QuantumScape. At the IPO, Kensington will change its name to QuantumScape and shares will trade on the NYSE under the ticker symbol QS.
Eos Energy Storage
B. Riley Principal Merger Corp. II (NYSE: BMRG) has reached a reverse merger deal with Eos Energy. The company’s pre-money value is around $290 million, and the combination is expected to provide about $225 million in cash, including $50 million of PIPE proceeds. Eos is taking on the lithium-ion battery makers with a zinc battery to store power from the grid.
The SPAC’s stock traded most recently at just over its initial offering price of $10 per share. The company will change its name to Eos Energy Enterprises. It has applied to trade on the Nasdaq under the ticker symbol EOSE.
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