Switchback Energy (NYSE:SBE) is trading lower on worries about the company’s postponed shareholder vote today. SBE stock is a SPAC, or a blank-check company, looking to take ChargePoint public via a merger. ChargePoint is a highly touted EV charging play, and is widely expected to do well once publicly traded.
The trick is, in order for SBE stock to succeed, shareholders must approve the ChargePoint SPAC merger.
SBE Postpones Virtual Special Meeting
Shares were down approximately 5% today on concerns the ChargePoint SPAC merger may take longer to be approved than initially thought. Today, a special shareholder meeting was convened, and then promptly adjourned, due to a lack of quorum to approve the required proposals for this business combination.
Right now, SBE stock has votes from about 45% of its outstanding shares either directly or via proxy. Unfortunately, a majority is needed in order for the merger to be approved. Because a significant percentage of Switchback shares are held by individual investors who may otherwise never vote during such meetings, this highlights the shift we’re seeing today in how companies are going to need to deal with investors moving forward.
Retail Investors Are Not At the Kid’s Table Anymore
I think this postponed vote is indicative of a pervasive trend in investing we’re seeing play out now. Retail investors are increasingly able to influence not only the stock prices of companies they invest in, but the strategic direction in which companies choose to go. This isn’t our grandpa’s stock market anymore. Wall Street analysts and big institutional money are losing their grip on the masses. Individual retail investors are investing their paychecks, and making money doing so.
Switchback’s large retail investor base is neither good nor bad for the company. These investors are clearly eager about the long-term growth potential of ChargePoint’s business model. However, the intricacies of voting may need to be learned by a younger, more inexperienced group of investors.
Where Does SBE Stock Go From Here?
The next special meeting is scheduled for Feb. 25. Accordingly, the company is now doing everything in its power to get shareholders out to vote later this month. Switchback and ChargePoint are currently undertaking a media campaign to encourage shareholders to come out and vote.
It’s in the best interest of retail investors to approve this deal. Thus, I think this deal will go through in short order. Additionally, I think ChargePoint’s SPAC merger is an intriguing one, and think this is a SPAC opportunity with the potential for some real upside in the near term. This short-term dip could be the entry point investors interested in EV charging technology need to get in at a more reasonable price.
Disclosure: On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
