1 min read

You Can't Put a Price on Transparency

I've historically been a large supporter of SPACs as a financial tool to accelerate the energy transition.

SPACs provide potentially patient capital with different incentives than the private markets and also create public equity for firms to offer as tender during additional acquisitions.

I also expected many EV SPAC's to not make it to production - these were after all early-stage startups competing in a capital-intensive industry. The competition is fierce and incumbents were going to enter the space too.

What I didn't expect was an announcement like the one Lordstown made yesterday to happen so soon.  Lordstown began trading under the ticker RIDE less than 8 months ago after a roadshow that led investors to believe the new funds would be the last the company ever raised.

It's worth noting that lockup periods for existing shareholders are typically 180 days post listing which adds another wrinkle to the story.

Early-stage startups are a risky bet, I've seen them up close and missed projections myself. But in this case, the forecast missed by over 24 months - a mind-blowing variance.

In a world where it seems every asset is getting a price that is arguably too high, it's important to remember that you can't put a price on thorough diligence and transparency.