What does the inclusion of the move to Texas actually have to do with the downfall of the company?
I get that it is the original title, but even the article itself points out that the company was in dire straits well before the move.
The move (and forced relocation of employees) was likely a way to force attrition, since it was followed fairly quickly with layoffs elsewhere.
If anything, including mention of the move in the title just muddles the readers' expectations of the article, IMHO, and the article would be better off without it.
Has any SPAC ever actually succeeded in the sense that whatever it purchased didn't die after a year or was atleast profitable? Every one of them always seemed like a huge obvious scam to dump the bags on dumb money.
I think that’s sort of the point of SPAC: a lot less scrutiny than a full on IPO so shakier companies can go public.
If someone is the type who willingly hand over their money knowing what a SPAC is and does, he’s a contrarian who smarter than everyone else, an idiot, or someone who thinks he can make a quick buck by letting the idiot hold the bag at the end — but really the latter two end up being the same.
I maintain a little de-SPAC portfolio to track their progress. Many of them are dead, there's about 50 companies left in my tracking now.
The only companies on this list with stock prices over the original $10 SPAC price are:
- Oklo (mini nuclear reactors)
- DraftKings (gambling)
- Hims & Hers (wellness telehealth)
- Grindr (gay hookup app)
The majority of companies have lost 80-95% of their original value. Many SPACs have done a big reverse split, so their price appears to be over $10 but the original price would have been in the hundreds.
I was going to ask this same question. Literally every SPAC I can think ranged from bad to unmitigated disaster. Probably my favorite example is Getaround, the car sharing company that tanked immediately after the SPAC merger. How did that deal even happen?
Does anyone know of a site that tracks the outcome of SPAC mergers? I found some articles but most of them are pretty old. Curious if there have been any successes.
It feels like so much "financial innovation" of the past 30 years in that it was just a way for rich people to get even richer and, as you say, leave the dumb money as bag holders.
Amazingly, they are one of the very few automotive folks that actually said "yes, sure" when I ask my requisite "can i drift it?" Unfortunately, I was driving it inside a building that was to be one of their future factories, and declined to actually do so for safety reasons.
I kind of like what the folks in British Columbia are doing for their EV prototypes for Semi Trucks (technically a hybrid, EV with onboard generator): https://www.edisonmotors.ca/topsy
As a meta question, at this point, what is the value add that these startups are trying to do? It seems like a ton of them fail to make a viable base platform profitable and able to mass produce. Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?
Or is the base platform the actual value that they're trying to execute on and failing?
The Chinese market is very competitive though with lots of quite successful companies that only got into EVs fairly recently. For example Huawei and Xiaomi (two phone manufacturers) started selling EVs last year and were able to ramp up production quite quickly. Apparently the cars are quite nice even and they sell well.
>Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?
That was more or less the arrangement between Magna Steyr and Fisker, which failed
- So, going back 10-12 years, Tesla suddenly came and ate legacy ICE makers' lunches on many fronts – launching a successful EV, requisite charging network, overall UX, UI, driver assistance features, performance, sales and delivery, costs, software development, components, repair etc.
- Legacy ICE makers took a long time to figure out how to respond. At first, many of them thought all they had to do to compete was to was to throw in a large portrait screen. Then there were many abominations of them trying to fit EV components into their ICE platforms. I would say the Germans didn't get good at it until 2023-2024 (but they still have a lot to figure out).
- During the time, the legacy ICE makers were figuring things out, the EV startups had the advantage of not having the burden of legacy and figuring things out from first principles. There was a lot of money to be made here. In my estimation, this window of opportunity has now mostly passed.
> It seems like a ton of them fail to make a viable base platform profitable and able to mass produce.
Automotive is essentially a volume game in the long run. This is hard and figuring this out is where the value is. Basically, if you're able to figure out this part, it's a lot less effort to figure out the other parts and control the entire thing. This is similar to how car companies make their own engines (other than in specialty, low volume cases).
> Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?
There is a market but it doesn't make sense for EV startups to do this because most of the value is in the previous bit, and the value add from this part is marginally less. Also, cars are complex and it takes a lot of work to integrate things made by others. Car companies do form partnerships to share these things.
Some cases:
1. Honda was late to the EV game and found it easier to form a partnership with GM. This resulted in the Honda Prologue, which is built by GM and is essentially a Chevy Blazer [1]. This model has been a success. However, Honda has cancelled the deal and will be releasing new cars built on its own platform [2].
2. Rivian is one company trying to scale on the platform side – they came out with high price-point vehicles. e.g. R1S competes with Range Rover. They're using the same platform for R1T trucks and for Amazon delivery trucks. Rivian had a partnership with Ford, where Rivian would make the platforms for Lincoln EVs, but Ford pulled out and are making Lincoln EVs on their own platform
VW Group was having major issues with its internal software and electronics tier I Cariad. So, they invested $5bn into Rivian so that they could use Rivian's expertise in this. See [3] for Rivian's perspectives on the various partnerships.
It was ~2005-ish, I was just out of highschool, I saw a short documentary talking about a (different) electric car company working on revolutionary electric vehicles that had their working components in the form of a "skateboard" with changable chassis on top. It's been decades now, I don't know what happened to them.
It was 2017, Canoo was founded, I actually bought some stock in them. A "little bird on my shoulder" told me to get out of that mess. Glad I did.
Moral of the story for car startups with pipe dreams. Release SOMETHING as quickly as possible, get money flowing as quickly as possible. Even if it's not a car, JESUS CHRIST make electric scooters FIRST and then move up slowly towards gold carts, then motorcycles, then eventually Electric Cars. Whatever you do, DO NOT spend decades without releasing a single product.
Readit News
Full title. Another L for the SPAC era.
I get that it is the original title, but even the article itself points out that the company was in dire straits well before the move.
The move (and forced relocation of employees) was likely a way to force attrition, since it was followed fairly quickly with layoffs elsewhere.
If anything, including mention of the move in the title just muddles the readers' expectations of the article, IMHO, and the article would be better off without it.
You might expand the full title to "After move interpreted by experts as likely a way to force attrition" to explain the relevance :)
If someone is the type who willingly hand over their money knowing what a SPAC is and does, he’s a contrarian who smarter than everyone else, an idiot, or someone who thinks he can make a quick buck by letting the idiot hold the bag at the end — but really the latter two end up being the same.
The only companies on this list with stock prices over the original $10 SPAC price are:
- Oklo (mini nuclear reactors)
- DraftKings (gambling)
- Hims & Hers (wellness telehealth)
- Grindr (gay hookup app)
The majority of companies have lost 80-95% of their original value. Many SPACs have done a big reverse split, so their price appears to be over $10 but the original price would have been in the hundreds.
Does anyone know of a site that tracks the outcome of SPAC mergers? I found some articles but most of them are pretty old. Curious if there have been any successes.
It feels like so much "financial innovation" of the past 30 years in that it was just a way for rich people to get even richer and, as you say, leave the dumb money as bag holders.
Deleted Comment
Amazingly, they are one of the very few automotive folks that actually said "yes, sure" when I ask my requisite "can i drift it?" Unfortunately, I was driving it inside a building that was to be one of their future factories, and declined to actually do so for safety reasons.
Have they seen any vehicle newer than, I dunno... 2010? Everything is a nondescript blob car these days.
Except the cybertruck, of course.
Dead Comment
I'm rather fond of the new Lotus Emira or the Aston Martin Valhalla, both which look like anything but a "nondescript blob".
Hell, most people wouldn't spend 100k on a tesla either, its just too expensive...
Or is the base platform the actual value that they're trying to execute on and failing?
That was more or less the arrangement between Magna Steyr and Fisker, which failed
- Legacy ICE makers took a long time to figure out how to respond. At first, many of them thought all they had to do to compete was to was to throw in a large portrait screen. Then there were many abominations of them trying to fit EV components into their ICE platforms. I would say the Germans didn't get good at it until 2023-2024 (but they still have a lot to figure out).
- During the time, the legacy ICE makers were figuring things out, the EV startups had the advantage of not having the burden of legacy and figuring things out from first principles. There was a lot of money to be made here. In my estimation, this window of opportunity has now mostly passed.
> It seems like a ton of them fail to make a viable base platform profitable and able to mass produce.
Automotive is essentially a volume game in the long run. This is hard and figuring this out is where the value is. Basically, if you're able to figure out this part, it's a lot less effort to figure out the other parts and control the entire thing. This is similar to how car companies make their own engines (other than in specialty, low volume cases).
> Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?
There is a market but it doesn't make sense for EV startups to do this because most of the value is in the previous bit, and the value add from this part is marginally less. Also, cars are complex and it takes a lot of work to integrate things made by others. Car companies do form partnerships to share these things.
Some cases:
1. Honda was late to the EV game and found it easier to form a partnership with GM. This resulted in the Honda Prologue, which is built by GM and is essentially a Chevy Blazer [1]. This model has been a success. However, Honda has cancelled the deal and will be releasing new cars built on its own platform [2].
2. Rivian is one company trying to scale on the platform side – they came out with high price-point vehicles. e.g. R1S competes with Range Rover. They're using the same platform for R1T trucks and for Amazon delivery trucks. Rivian had a partnership with Ford, where Rivian would make the platforms for Lincoln EVs, but Ford pulled out and are making Lincoln EVs on their own platform
VW Group was having major issues with its internal software and electronics tier I Cariad. So, they invested $5bn into Rivian so that they could use Rivian's expertise in this. See [3] for Rivian's perspectives on the various partnerships.
[1] https://www.motortrend.com/news/2024-honda-prologue-chevrole... [2] https://www.caranddriver.com/news/a43699034/honda-new-ev-pla... [3] https://electrek.co/2024/07/23/rivian-ceo-spills-tea-why-for...
The stock remains in lala land
It was 2017, Canoo was founded, I actually bought some stock in them. A "little bird on my shoulder" told me to get out of that mess. Glad I did.
Moral of the story for car startups with pipe dreams. Release SOMETHING as quickly as possible, get money flowing as quickly as possible. Even if it's not a car, JESUS CHRIST make electric scooters FIRST and then move up slowly towards gold carts, then motorcycles, then eventually Electric Cars. Whatever you do, DO NOT spend decades without releasing a single product.