Spartan Energy Acquisition Corp (NYSE: SPAQ) is rallying up the bulls as we inch closer to the SPAQ Fisker merger. Investors are expecting to ride the bullish undertone in the lead up to the merger. However, below the surface, a SPAQ Fisker investment is exhibiting risks that investors must know. Thus, today’s article will explain when SPAQ will become Fisker, and the associated rewards and risks.
Table of contents 1. When will SPAQ become Fisker? 2. Potential perils and rewards with a SPAQ investment.
When will SPAQ become Fisker?
SPAQ will become Fisker on the 14th of February, 2021. “The merger values Fisker at a whopping $2.9 billion but we will only see the EV company reap $1 billion.” Nonetheless, Fisker is pumping all the reverse merger funds into developing its all-electric Ocean SUV, which is expected to be ready by the end of 2021. The set back from the 14th of August to the 14th February 2021 initially disappointed investors. However, the 15% over the past five days could indicate a strong bullish future towards the merger (opinion not advice).
Post-merger forecast – will we see another Nikola?
Before I begin, I am obliged to remind our viewers that this is not advice but rather investment commentary from extensive research
The first potential red flag of a Fisker investment is its similarities with Nikola. Pushing the fact that both went through a SPAC aside, which are receiving extreme overvaluations (opinion not advice), Fisker has yet to manufacture a product. Founder Henrik Fisker, expects its all-electric Ocean SUV to come to fruition at the end of 2021, which translates to hype style media over the coming months. Not to mention the delay in the merger could impact the Ocean SUV timeline. YIG stresses the product point because we all know how no-product hyped up companies can turn out.
Moreover, Henrik Fisker’s history with bankruptcies could pierce the armour of investor confidence. Fisker’s first business venture, Fisker Automotive, ended in turmoil largely due to “production delays …. and problems with a key battery supplier”. A dark track record should make short-term and long-term investors cautious.
A SPAQ Fisker investment could still have significant upside potential. First, the reversal since the post-merger announcement is suggesting the bulls are retaking control. (opinion not advice) Especially as SPAQ is up 15% in 5 days. The EV and SPAQ boom should also see Fisker receive a tidal wave of media coverage, which could see retail investors continue to pour into the SPAC. The ability to learn from mistakes could also see Henrik Fisker turn the rising EV business into a spectacle.
SPAQ Fisker forecast
Overall the delay in the merger is a double-edged sword. On the one hand there is more time for the SPAQ Fisker hyper to grow. However, the next few months will incur a significant amount of volatility. From the election to EV overvaluations, to possible market corrections from potential vaccine delays or increased economic destruction. Thus, a SPAQ Fisker investment holds both material risk and reward, which means setting concrete stop losses and profit targets is a must.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Patrick McLoughlin, Senior Manager of YIG.