The SPAQ Stock Merger With Fisker Closes Soon, Pushing It Higher

Spartan Energy Acquisition (NYSE:SPAQ) will close its merger deal with Fisker, an electric vehicle (EV) maker, on Oct. 28. SPAQ stock has risen 46% since its IPO and trades at $14.13 per share.

The Fisker logo hangs on display at the November 2011 International Auto Show.
Source: Eric Broder Van Dyke /

It is likely to go much higher over the next year as it trades on the New York Stock Exchange under the new ticker FSR.

The deal with SPAQ stock was announced on July 13 and will provide $1 billion to the company to allow it to begin its EV production. It will use the money to produce its electric SUV, the Ocean.

As I wrote in my last article on Sept. 1, SPAQ stock is worth a good deal more than its present stock price. I argued that it was worth at least $38.88 per share. This was based on the company’s forecasts and its comparable values.

It represents a potential upside for the stock of at least 160% above today’s price. That is a very good potential return for most investors.

SPAC EV Stocks Are Popular

Moreover, investors have been very keen on SPAC (special purpose acquisition corporation) stocks that merge with EV companies like Fisker. There are several other SPAC/EV deals that are coming public soon.

For example, DiamondPeak Holdings (NASDAQ:DPHC), another SPAC stock is closing on its merger with Lordstown Motors on Oct. 22. Lordstown is planning on making a full-sized EV pickup truck, the Endurance, at its Lordstown, Ohio plant once the merger closes.

In addition, another EV company, XL Fleet, recently announced its plan to merge with another SPAC stock, Pivotal Investment Corp II (NYSE:PIC). PIC stock is now at $10.75, implying that the SPAC stock is already up almost 9% since it announced its merger with XL Fleet.

In August Hennessey Capital Acquisition Corp (NYSE:HCAC) announced it was merging with Canoo, another EV manufacturer. HCAC stock has since risen to $10.60 per share, up 6% from the company’s IPO.

Moreover, Tortoise Acquisition Corp II (NYSE:SHLL) announced in June a merger with Hyliion Holdings, an EV truck parts company. The deal closed last week and the new symbol for Hyliion Holdings (NYSE:HYLN) is now trading at nearly $29 per share. This implies that the SPAC stock, now an EV stock, is up nearly 300% from the SPAC’s original IPO at $10.

There are more EV and EV related deals on the way. For example, Romeo Power Technology, a lithium-ion maker, recently agreed to merge with a SPAC called RMG Acquisition Corp (NYSE:RMG). Faraday Future, an EV SUV maker, told reporters recently it plans on merging with a SPAC, yet unnamed.

What’s Next With SPAQ Stock

There seems to be a release effect on these EV stocks once their mergers close and a new trading symbol for the same stock is established. This release seems to allow new shareholders to come in on the stock, almost as if it was an IPO. In other words, there is a strong upward bias on these EV stocks after they merge with their SPAC sponsors.

This could easily happen with Fisher and SPAQ stock once the new symbol FSR starts trading at the end of this month. There is also another reason why these SPAC mergers may be beneficial for EV companies.

The SPAC merger process seems to facilitate EV companies like Fisker in moving their manufacturing programs forward. This is what Henry Fisker, the Fisker CEO, recently told Barron’s in a podcast about the future of automobiles.

Seeking Alpha recently summed up the podcast interview with Fisker. Interestingly, he said that “the SPAC process raises funds right away, making it easier to ink a deal with a manufacturing partner.” In other words, it allows the company to immediately move forward with its plans.

For investors in SPAQ stock, they know that after Oct. 28, upon completion of the merger, Fisker will be able to deliver on its plans. That will be the catalyst the stock needs to move up 166% to its expected value.

On the date of publication, Mark R. Hake did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Mark Hake runs the Total Yield Value Guide which you can review here.

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