Log in

Fisker Inc (NYSE:SPAQ) Stock: The Next Big Player in EV?

Wednesday, October 14, 2020 | Sean Sechler
Fisker Inc (NYSE:SPAQ) Stock: The Next Big Player in EV?

Investors that are interested in the electric vehicle (EV) space have a lot of different companies to choose from. Many of these stocks have performed well this year and continue to benefit from bullish momentum thanks to optimism surrounding the industry and environmental concerns. As these companies update and advance the technology that powers their eco-friendly vehicles, we will likely see an acceleration in their widespread adoption. People are clearly open to the change, as over 80% of prospective car buyers today want an EV.

With so many different EV stocks to choose from, it can be difficult to sort through them all and decide which companies are the real deal and which ones are benefitting from pure speculation. With that said, there’s one new EV company worth monitoring that will begin trading publicly via a SPAC merger later this month. Fisker Inc. could be a nice option for investors that are interested in up-and-coming companies in the sector and it has the potential to end up a big player in the industry in the coming years. Let’s take a deeper look at Fisker below and decide whether or not it’s worth adding to your portfolio.

The World’s Most Sustainable Vehicle

We know that there is plenty of competition in the EV industry and that it will take a lot to overthrow Tesla (NASDAQ:TSLA), but the truth is that there’s plenty of room for other companies to carve out their market share. Fisker is an interesting company as it was founded by renowned luxury car designer Henrik Fisker. He has designed some truly classic luxury automobiles including the BMW ZE, the Aston Martin V8 Vantage, and the BMW X5. Mr. Fisher has been hard at work on the Fisker Ocean, a luxury electric SUV that will launch in Q4 2022.

The Fisker Ocean has been dubbed the “world’s most sustainable vehicle” thanks to the fact that it is constructed with materials made from recycled, abandoned fishing nets & plastics from the ocean. It’s a battery-powered electric SUV that has a range of 250-300 miles per charge and comes with 4-wheel drive and high-performance dual motors. There’s also the intriguing option of a full-length solar roof that can potentially provide over 1,000 additional miles for free each year.

Fisker wants the Ocean to directly compete with Tesla’s Model X and Model Y vehicles as it features a slick design, optional solar roof, and strong battery performance. Also, the Fisker Ocean will retail for around $37,500, which is significantly less expensive than a Tesla Model X or Model Y. Although there’s still a long way to go until the Fisker Ocean launches, it’s clear that this is a company that should be on EV investors’ radars going forward.

Reverse Merger Closing Later this Month

We’ve seen a lot of positive buzz surrounding Special Purpose Acquisition Companies (SPACs), and Fisker could be the next one to take off. The company plans to complete a reverse merger deal with Spartan Energy Acquisition (NYSE:SPAQ) later this month on October 28th. After the merger is complete, Fisker will start trading on the New York Stock Exchange under the ticker FSR.

The deal will provide $1 billion to Fisker Inc so that it can start production on its innovative electric vehicles starting with the Fisker Ocean. Back in July, Fisker provided investors with a projection of $13.2 billion in revenue and 225,000 deliveries by the year 2025. If the global EV market continues its rapid growth, those numbers are possible. However, there could be some bumps along the road to profitability for this company.

It’s worth noting that Fisker plans to outsource the manufacturing of its vehicles by partnering up with Volkswagen. This should help the company focus more on vehicle design, technology, and software while leaving the manufacturing up to one of the largest automobile makers in the world. However, no deal is on the table yet, which is something for investors to monitor.

Final Thoughts

Although this type of investment isn’t for everyone, there’s certainly potential here for Fisker going forward. Keep in mind that SPACs can be extremely volatile and speculative investments. Look at what has happened with Nikola Motors (NASDAQ:NKLA) and how it has affected the sentiment around SPACs for an instant reminder of how risky SPAC investing can be.

With that said, it wouldn’t be surprising to see shares of Spartan Energy rally into the merger date and perform well under Fisker’s new ticker. If you are willing to stomach the risk, consider adding shares now ahead of the reverse merger. More conservative investors that are interested in EV companies are likely better off waiting for more details about Fisker and how it is progressing with the production of the Fisker Ocean before opening a new position. 

13 Stocks Institutional Investors Won't Stop Buying

University endowments, pension funds, sovereign wealth funds, hedge funds and other institutional investors have recently been pouring money into a a group of 13 elite stocks.

These institutional investors don't get easily swayed by hot stocks that are popular with retail investors. You probably won't see a Tesla or a SnapChat in this group, because institutional investors know that these "popular kid" stocks almost always aren't great investments. However, you will find some incredibly solid companies on this list backed by real earnings and real fundamentals.

In order to identify these stocks, we had to comb through every 13D and 13F filing that institutional investors have filed with the SEC in the last quarter. After reviewing more than 5,000 filings, we have identified 13 companies that institutional investors have been buying left. Big money investors are pouring hundreds of millions of dollars into these stocks.

View the "13 Stocks Institutional Investors Won't Stop Buying".

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.