Fisker is also expected to go public through a merger with a company backed by Apollo Global
Shares of Tesla (TSLA) are under pressure on Thursday after the company's biggest shareholder behind Elon Musk, Baillie Gifford, reported yesterday that it cut its stake to 4.25% from 7.67%. Meanwhile, QuantumScape (QS), the battery supplier for electric vehicles backed by Microsoft (MSFT) co-founder Bill Gates and Volkswagen (VWAGY), has announced that it plans to go public through a special purpose acquisition company, or SPAC. The deal mirrors that of Nikola (NKLA), which went public in June through a reverse merger with VectoIQ, and that of Lordstown Motors, which will merge with DiamondPeak Holdings (DPHC), another SPAC.
GIFFORD TRIMS STAKE: U.K. fund manager Baillie Gifford disclosed in a regulatory filing on Wednesday that it has reduced its stake in the electric carmaker to 4.25% from 7.67%. The investment company said the recent rise in Tesla's share price meant it needed to reduce its holding due to guidelines restricting the weight of a single stock in client portfolios. However, James Anderson, co-manager of Baillie Gifford's flagship Scottish Mortgage Investment Trust, said "we intend to remain significant shareholders for many years ahead. We remain very optimistic about the future of the company," according to Dow Jones. "Tesla no longer faces any difficulty in raising capital at scale from outside sources but should there be serious setbacks in the share price, we would welcome the opportunity to once again increase our shareholding," Anderson reportedly added.
BATTERY SUPPLIER GOING PUBLIC VIA SPAC: A battery supplier for electric vehicles backed by Microsoft co-founder Bill Gates and Volkswagen is the latest automotive company to announce plans to go public through a special purpose acquisition company, or SPAC, CNBC's Michael Wayland reported. QuantumScape, a developer of what are known as "solid-state" batteries, on Thursday said it has entered into a definitive agreement to merge with blank check company Kensington Capital Acquisition (KCAC) to become a publicly traded company in the fourth quarter, the author noted.
This is the latest SPAC deal for an automotive company following electric vehicle company Nikola's IPO in early June. Earlier this month, Lordstown Motors and DiamondPeak Holdings also announced they have entered into a definitive agreement for a business combination that would result in Lordstown becoming a publicly listed company. Upon closing of the transaction, the combined company will be named Lordstown Motors and is expected to remain listed on the NASDAQ and trade under the new ticker symbol, "RIDE." The business combination values Lordstown at an implied $1.6B pro forma equity value, at the $10.00 per share PIPE price and assuming minimal redemptions by DiamondPeak stockholders. The transaction is expected to close in the fourth quarter and includes an investment of $75M from General Motors (GM).
Meanwhile, electric vehicle start-up Fisker announced last month that it would merge with Spartan Energy Acquisition (SPAQ), a special purpose acquisition company sponsored by an affiliate of Apollo Global Management (APO). The deal is expected to close in the fourth quarter.
PRICE ACTION: In morning trading, shares of Tesla have dropped almost 6%, while Kensington Capital Acquisition's stock has jumped about 64% to $16.40.
Keywords: electric vehicles, auto, carmaker, battery, spac