Besides COVID-19 plays, the other sectors for smart investors to be in at the moment are SPACs and EV stocks. Right now, the best combo bet is Spartan Energy Fisker. Spartan Energy is backed by billionaire Leon Black’s Apollo Global Management and Fisker is led by automotive pioneer Henrik Fisker. Together, they plan on becoming the next Tesla. While that is a tall order to fulfill, the fact is that there is so much momentum for EV plays that Spartan Energy Fisker just became a must-own.
About Spartan Energy Fisker
First up, here’s a little background info for those that are looking at Spartan Energy Fisker for the first time. Spartan is a SPAC focused on the energy value-chain in North America and was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Spartan is sponsored by Spartan Energy Acquisition Sponsor LLC, which is owned by a private investment fund managed by an affiliate of Apollo Global Management.
Based in Los Angeles, California, Fisker is revolutionizing the automotive industry by developing the most emotionally desirable and eco-friendly electric vehicles on Earth, supported by advanced mobility solutions. The proposed transaction is anticipated to provide Fisker the necessary funding to bring its first product, the Fisker Ocean, to production in late 2022.
The Fisker Ocean is a fully electric SUV with premium styling and features and has been designed to be the world’s most sustainable vehicle, including extensive use of environmentally friendly and recycled materials. The Fisker Ocean will be available to consumers through an innovative leasing package, optimized for driver convenience and accessibility. The vehicle has won numerous awards since its debut at the Consumer Electronics Show earlier in 2020, highlighting strong market reception for this type of vehicle and for the Fisker ethos of appealing design and sustainability.
Reasons To Be Bullish On Spartan Energy Fisker
There are a number of reasons to be bullish on Spartan Energy Fisker. First, there are now over 7,000 reservations for the Fisker Ocean, scheduled for launch in 2020. In the same amount of time, Tesla only had 3,000 orders for its Model S when it launched.
The Fisker Fam is now a community of 30,000+ registered users in 30 countries, with over 7,000 advanced reservations for the Fisker Ocean. Thanks for joining us on this journey & here’s to a Clean Future for All.#fisker #electricvehicles #spaq pic.twitter.com/fdkzorVVKK
— Fisker Inc. (@FiskerInc) July 31, 2020
Second, Henrik Fisker is an EV automotive pioneer. He is best known for designing luxury cars including the BMW Z8, Aston Martin DB9, Aston Martin V8 Vantage, Fisker Karma, Galpin-Fisker Mustang Rocket, VLF Force 1 V10, VLF Destino V8, Fisker EMotion, Fisker Ocean, and Fisker Orbit. The Fisker Karma was the world’s first premium plug-in hybrid and received a handful of accolades, including the International Design Awards Product Design of the Year, Silver Edison Award, Automobile magazine’s Design of the Year Award, Top Gear Car of the Year, Fast Company’s Innovation By Design Award, and was named one of Time magazine’s 50 Best Inventions of 2011.
Third, this is a comeback story for Henrik Fisker. Fisker resigned as chairman from Fisker Automotive in March 2013, because of disagreements with management about business strategy. Later that year, the company declared voluntary bankruptcy. Assets of Fisker Automotive were sold at a bankruptcy auction in 2014 to Chinese automotive parts firm Wanxiang for $149.2 million. In September 2015, Fisker Automotive was renamed Karma Automotive. The Fisker Karma was renamed the Karma Revero in 2016. Henrik Fisker and Fisker Inc are not affiliated with Karma Automotive or its parent company Waxiang. However, the pain of what Henrik went through the first time is driving him to succeed with Spartan Energy Fisker.
Fourth, Spartan Energy Fisker just unveiled three new electric vehicles for 2025. Fisker shared an image of its previously announced Ocean SUV in front of three other models: a “super-sports sedan” which is based on the E-Motion concept, another crossover model, and a truck. The pickup is still covered in the latest image, but the company already showed photos of the Alaska pickup back in February.
Fifth, reports are that Spartan Energy Fisker will use VW’s MEB electric vehicle platform. Volkswagen supplies the battery pack, platform, and electric motors, and Fisker supplies the bodies. This is a win-win for both companies and lessens the risk of owning Spartan Energy Fisker.
Sixth, the key to making big money is getting in early. We weren’t the first, but we did recommend Tesla back in 2018. We also got our subscribers into NIO stock between $5 and $6, which you can read here. At current levels, Spartan Energy Fisker is incredibly cheap. The business combination valued Fisker at a $2.9 billion pro forma equity value, at the $10.00 per share PIPE price. Tesla has a current market cap of $294 billion, NIO $15 billion, and Nikola $12 billion.
Seventh, the company is partnering with Electrify America for access to its charging stations. Electrify America is investing $2 billion through 2027 to build out a nationwide electric charging network. This puts Fisker’s charging capabilities on par with Tesla.
Eighth, Fisker is partnering with Cox Automotive for local storage and maintenance services. Cox Automotive has 78 service locations in the U.S. and 108 global locations which will be authorized as full-service maintenance hubs for Spartan Energy Fisker.
Why Is Spartan Energy Fisker Mis-priced?
The reason Spartan Energy Fisker is so cheap at the moment is that the merger has not closed yet. The two companies just agreed to extend the date by which Spartan has to complete a business combination for an additional six months, from August 14, 2020 to February 14, 2021. The Fisker Transaction is expected to be completed in the fourth quarter of 2020. While this is disappointing in the short-term, there two key takeaways.
- The deal will close
- Investors get a few extra months to add cheap exposure.
Spartan Energy Fisker is an opportunity we don’t want investors to pass up. We saw what happened with Nikola after its merger with VectoIQ (VTIQ) was approved by shareholders. The stock went from $13 to $90 in less than two months. If we had to pick between owning Fisker or Nikola, we would take Fisker over Nikola any day of the week. Spartan Energy Fisker is Henrik Fisker’s comeback vehicle and we can’t wait to see what he does to the short-sellers. If the shorts think Elon Musk made them wet their pants, they haven’t seen what Henrik Fisker is going to do to them.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in NYSE:SPAQ or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.
Image Courtesy of Fisker