Lordstown Follows Peers' Rush To Stock Market With SPAC Merger

Commenting on the news, Roth Capital analyst Craig Irwin said he sees Lordstown's SPAC deal driving value for Workhorse (WKHS), which owns a small stake in the former. Workhorse owns 9.99% of Lordstown Motors and the cash value of a successful launch of the Endurance all-electric truck is worth over $100 million in royalties and fees to Workhorse, he contended. Irwin has a Buy rating and a price target of $27 on Workhorse shares.


Lordstown is not the only EV maker to go public in recent months via a SPAC reverse merger. Nikola did the same back in June, when it announced the completion of its business combination with VectoIQ, a publicly-traded special purpose acquisition company.

Ahead of the company's quarterly results on August 4, Deutsche Bank analyst Emmanuel Rosner added Nikola to the firm's short-term "Catalyst Call Buy List." With limited focus on near-term earnings absent any revenue, Nikola could potentially use its earnings call to provide "highly-anticipated business updates," including naming customers for its BEV truck, a commercial partner for its hydrogen stations, a manufacturing partner for the Badger pickup, as well as an updated Badger reservations count, Rosner contended.

Management had indicated it would disclose these sometime in the second half of 2020. Rosner pointed out Nikola is down 40% since July 20, when shares from early investors from warrants and the PIPE became tradable. However, this new supply of shares has been largely absorbed and the stock price has stabilized in most recent session, he contended. The analyst sees 10%-20% near-term upside in the stock, despite keeping a Hold rating on Nikola.

Meanwhile, electric vehicle start-up Fisker announced last month that it would merge with Spartan Energy Acquisition (SPAQ.UN), a special purpose acquisition company sponsored by an affiliate of Apollo Global Management (APO). The deal is expected to close in the fourth quarter.

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Disclosure: None.

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