Two initial public offerings (IPOs) out Wednesday got a lot of attention, while a third did not. Both Palantir Technologies Inc. (NYSE: PLTR) and Asana Inc. (NYSE: ASAN) posted solid first-day jumps, up 34% and 37%, respectively. Both were direct listings.
Also on Wednesday, Velodyne Lidar Inc. (NASDAQ: VLDR), a tech firm that makes lidar (light detection and ranging, sometimes called laser) sensors for autonomous vehicles and drones, came public courtesy of Graf Industrial, a special purchase acquisition company (SPAC, or blank-check company) formed in April. The stock opened at around $25 and sank nearly 25% to close its first trading day at $18.69.
In the green technology space, direct listings and traditional IPOs seem to have taken a back seat to reverse mergers with SPACs. The timeline is roughly this: the SPAC raises money with an IPO for the sole purpose of acquiring another company. Then the SPAC finds a startup that it can acquire and take public. It sets up the deal and executes the IPO, and, finally, changes its name (hence the “reverse”) to the name of the company that it acquired a few months earlier.
It is likely that the current issues surrounding another green tech auto company that came public through a SPAC is partly responsible for Velodyne’s first-day tumble. Electric/fuel-cell truck maker Nikola Corp. (NASDAQ: NKLA) has been under terrific pressure following a scathing short seller report released a few weeks ago.
It is equally likely, however, that the run-up in the pre-IPO share price (Graf’s IPO priced at $10 a share) reflects some front-running and profit-taking at Velodyne’s IPO.
On Thursday, another reverse merger was expected to take place, but a last-minute dispute over how the company’s board is organized delayed the IPO. Hyliion is coming public in a reverse merger with Tortoise Acquisition Corp. (NASDAQ: SHLL). Hyliion makes electric drive trains for heavy trucks and is considered a competitor to both Nikola and Tesla Inc. (NASDAQ: TSLA), and it also may be a victim of front-running.
The SPAC, which came public at $10 in April, has traded as high as $58.66 in anticipation of the tie-up with Hyliion. The shares traded down nearly 10% Thursday at $45.10 after dropping 7% on Wednesday. Following the IPO, Tortoise will change its name to Hyliion and trade on the New York Stock Exchange (NYSE) under the ticker symbol HYLN.
Here are six more SPAC-reverse merger deals that are lined up to be completed by the end of the year. Three involve electric vehicle (EV) makers, two are energy storage companies and one is a maker of lidar equipment.
Hennessy Capital Acquisition Corp. (NASDAQ: HCAC) has announced a reverse merger with electric vehicle maker Canoo Holdings. The automaker plans to release three vehicles with the first, a Lifestyle van, arriving in 2022, a delivery van scheduled for first shipments in 2023 and a Sport vehicle due in 2025. At the time the merger was announced, Canoo was tabbed to receive about $600 million from a private investment in public equity (PIPE) offering worth $300 million and another $300 million from the cash Hennessey put in trust following its own IPO.
Hennessey Capital’s closed at $11.13 on Thursday, up about 10% from its April IPO price of $10 per share. Once the offering is completed, Hennessey will change its name to Canoo and shares will trade on the Nasdaq under the CNOO ticker symbol.