Why Spartan Energy SPAC of Fisker is an ESG Play of the Decade

I’m not a fan of the SPAC craze. I think it’s a nefarious way to go IPO. However $SPAQ might be the exception. Fisker, this time around, is extremely ESG orientated and I think that’s the future of investing.

• Fisker will merge with Spartan Energy Acquisition, a special purpose acquisition firm, to go public.
• The deal values the electric vehicle startup Fisker at $2.9 billion.
• Spartan Energy opened Monday at more than $20 a share, but then gave up those early gains.

The price of $SPAQ is $14 today and compared to Nikola, this is a company I’d much rather be in bed with.

The aspiring California-based automaker will merge with Spartan Energy Acquisition ($SPAQ), a special purpose acquisition firm. The deal is expected to close in the fourth quarter. The Fisker Ocean is kind of cool, and their lease program will be popular with Millennials and eco-conscious GenZ.

Boasting a unique flexible lease, it’s coming in 2022. It features a vegan interior and recycled materials. The EV craze of 2020 is outstanding, but the key point is it’s a cementing of the ESG trend in investing. Tesla’s stock is $1,500 today, boosting many other related EV stocks.

Stock in electric-vehicle makers are on fire. Special purpose acquisition companies, or SPACs, are doing even better. Transportation that’s a winner for the environment is just huge! It’s a trend from the future.

I’ve spoken about Rivian, Hyliion, Nio and Nikola before, and before I get to writing more about Tesla, we have to think of Fisker as an eco-friendly dark horse. They understand the new consumer. That’s what’s most exciting about investing in $SPAQ, though I have not yet.

These’s another Chinese IPO coming called Li Auto. Founded in 2015, Li Auto is a China-based manufacturer that filed paperwork with the SEC last week to debut on the American market with a $100 million offering. The company began production of its first model, Li ONE, in November 2019, and it has delivered more than 10,400 vehicles as of June 30.

So what? Investors have been clamoring for early-stage EV startups like Nikola Corp. and Workhorse in hopes of buying the next Tesla. This is not Fisker’s first go around.

Henrik Fisker, founder, chairman and CEO of Fisker, told CNBC that the deal was the “best way” to get the vehicle to production. He said the company will not need to raise any additional capital to launch the product.

SPACs are certainly a hack to go IPO in 2020. Fisker, a well-known auto designer, has been promising to bring a new all-electric vehicle to market for several years. The Ocean is as eco-conscious a vehicle as perhaps one can imagine in the early 2020s.

What should you know? Fisker is credited with designing the BMW Z8 and Aston Martin DB9. He previously launched a company with the same name that brought a plug-in hybrid vehicle to market called the Karma. The company went bankrupt in 2013.

SPACs are incredibly speculative, due warning applied. A SPAC is commonly referred to as a “blank check” company because investors essentially write a check to a publicly traded shell company whose sole intent is to go shopping for a private company and in effect bring it public via the listed holding company.

The new investor has to tread carefully in the SPAC waters. Clearly $SPAQ is just one of many EV startups that will be playing in a gigantic new market. Many of the old automobile makers will not make the transition well. Fisker’s ESG branding is fantastic and that alone would make me want to dip my toes in this one.

I’m sure I’m not the only young investor who feels this way. We want our investing somehow to “make the world a better place”, no matter how small the impact.

Fisker plans to sell its electric SUV, the Ocean, in 2020 at a base price of $37,500. It will have a 250–300 mile all-electric range. With 566 liters (20 cubic feet) of trunk space, the vehicle will present practicality and utility. That’s the kind of ESG minimalism I can get into.