Investigations, humiliations, and executive disruption persist to tank shares of EV start-ups
Key takeaways:
- EV start-ups Nikola, Lordstown Motors, Canoo, Faraday Future, Fisker, and Lucid Group, went public through SPAC sales over the previous two years.
- Their shares have dropped by double-digits this year and are selling at or around 52-week lows.
- All but two, Fisker and Faraday Future, have revealed national inquiries.
- Nikola creator Trevor Milton is prepared to go on trial on April 4 for allegedly cheating investors in that firm’s IPO, among other things.
Probes and trials to being for EV Start-ups:
CEO James Taylor liked to split his electric vehicle firm by remaining out of controversies that destroyed multiple opponents.
“We have no cases; no management problems, that we’re conscious of; we’re delivering; we’re keeping our nose pure,” the ex-General Motors executive informed CNBC in early November, naming the start-up’s system “conventional” and “anti-climactic.”
Taylor was thriving in doing so until the previous week, when he and Chairman Jason Luo, both cofounders of the firm, quit their positions late Tuesday following an internal investigation into some of their share assets.
The resignations were directed to several analyst downgrades, pushing ELMS shares to plunge by 53% the previous week, including an almost 50% decline on Wednesday. The stock is down another 17% this week to less than $2 a share.
ELMS’ issues are the latest for EV start-ups that went public through exceptional aim investment firms or SPACs over the previous year or two. Troubles at other firms have likewise led to executive tours and probes by the Department of Justice and Securities and Exchange Commission.
“We’re in a position where the SEC and others have become extremely skeptical regarding SPACs,” stated Priya Huskins, partner at Woodruff-Sawyer, a consulting company and a leading insurance broker in the SPAC market. “It is very unhelpful to SPAC world to have even a hint of humiliation, and self-dealing scandals are amongst the most destructive.”