Even as the stock market climbs to new highs, the bottom seems to be falling out of many E.V. companies that merged with the shell outfits known as special purpose acquisition companies, or SPACs, which Wall Street has used to pour money into fledgling ventures seeking funding. Shares of Nikola, which is developing heavy trucks, have fallen from around $65 to about $12, for example. The S.E.C. is looking into allegations by an investment firm that Nikola made false statements about its technology. The company has denied wrongdoing, but it acknowledged in February that some of its past statements were “inaccurate in whole or part.”
Special purpose acquisition companies are also known as blank-check companies, because they allow start-ups they acquire — like Lordstown and Nikola — to raise capital, often without revealing detailed plans for its use. The rush to start such operations has abated in recent months in the face of rising scrutiny from securities regulators.
“A lot of these companies are going public too early,” said Erik Gordon, a business professor at the University of Michigan who closely follows the auto industry. “They have the risk profile for venture capital and private investment. They really don’t make sense as public companies yet.”
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