The electric car manufacturers Nikola and Fisker have shown the way: start-up companies with sufficient investor interest can make the leap to the stock exchange in the fast lane. Special investment vehicles are used for this.
When the e-car manufacturer Canoo announced its stock market plans in the middle of the week, the company had already pressed the “gas pedal” in the direction of the trading floor. Canoo, which is led by former BMW manager(worked there for 30 years) Ulrich Kranz, is joining an already publicly listed company, Hennessy Capital Aquisition Corp IV together. The transaction should be completed by the end of the year. The merged company will then trade under the name Canoo and be listed on the Nasdaq. From 2022, the plan is to bring “lifestyle vehicles”, minibuses and commercial vehicles with electric drives onto the market on one platform.
Canoo will receive another 300 million dollars to finance growth. This is done via a PIPE (Private Investment in Public Equity), a purpose-related capital injection for investors which is a part of the acquisition deal.
The listed parent company was founded and listed on the stock exchange for the purpose of enabling promising young companies to get off to a quick start on the trading floor.
Such companies, so-called SPACs (Special Purpose Acquisition Company) already have a certain tradition in the USA. They act as a capital collection point, mobilizing billions of dollars while looking for interesting investments. Investors, mostly large-scale investors such as hedge funds, fund companies or asset managers, do not have to search for high-growth newcomers to the stock market. The companies themselves save the time-consuming search for investors and a lot of effort and costs when going public.
SPACs are currently particularly popular in the auto business. The sports car manufacturer Fisker announced in July that it would go public through the investment company Spartan Energy Aquisition Company. And Nikola, hydrogen-powered trucks specialist, had made it to the trading floor a month earlier via VectoIQ Aquisition.
Around eight billion dollars were collected via SPACs in the second quarter of 2020 alone. More than 20 of the investment companies were launched. The rental business AirBnB and the financial services provider Bloomberg are considered possible candidates for a quick start on the stock exchange in the near future.