The race to bring electric vehicles to market is leading many private EV companies go public via SPACs — and CNBC's Jim Cramer said one the EV companies that's going public is not a worthy investment.
What Happened: On Friday’s “Mad Money” show, host Jim Cramer shared his thoughts on Spartan Energy Acquisition Corp SPAQ, the company set to bring Fisker to the public markets.
Cramer compared Fisker and CEO Henrik Fisker to Nikola Corporation NKLA and Trevor Milton, the Nikola founder who has since resigned from the company.
Cramer discussed the history of Fisker and its previous Karma car. That company went bankrupt, but Henrik Fisker maintained the brand name, which is now the new company.
The former Fisker company had battery issues and was sued by both Tesla Inc TSLA and Aston Martin, Cramer said.
“It’s one thing to fail and then try again,” he said. “It’s another thing to fail and then lie to your investors and then try to do it again, this time as a public company.”
Cramer also said Fisker “feels like a business plan in search of a business plan.”
Why It’s Important: Cramer is highlighting the risk of investing in EV startups that have no sales or cars in production. This is true of Fisker, as its first car is expected to enter production in 2022.
It's important to note that Fisker won a lawsuit from Tesla over stealing designs. Fisker was hired by Elon Musk to do body design for Tesla vehicles.
Fisker has been somewhat promotional on Twitter, sharing preorder numbers and promising big things to come.
Henrik Fisker is planning on operating with more of an Apple AAPL model, with outsourced production instead of Tesla’s vertical integration.
“We think of the future of automotive the way Apple thought of phones,” Fisker told Car and Driver.
“The OEMS haven’t perfected the electric car, but they’ve perfected manufacturing, so why not take advantage of that?”
What’s Next: Fisker did not respond to the criticism from Cramer, choosing instead to tweet this:
“I’m sorry! At this point I refuse to spend $millions on promotional videos or grand events! Our development team & business deal team, r working all out to deliver! Fisker Ocean that will give greater value for $$ than any other EV on the planet! Big updates in Oct! #fisker #EV”
The merger between Spartan Energy Acquisition Corp and Fisker was extended, with a deadline now set for February 2021.
SPAQ Price Action: Shares of Spartan Energy Acquisiton were trading 6.15% higher to $14.50 at last check Monday.
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