Size of the text
The Ocean of Fisker.
Fisker Photo courtesy of Fisker
Maker of electric vehicles
Fisker
has a new major backer. It’s not wholly new, but it’s a start.
Magna International is a company based in the United States.
An old partner is an auto supplier who recently disclosed a big investment in the electric vehicle stock. The stock of Fisker (ticker: FSR) has risen 22.4 percent so far this year, compared to a 15.9 percent growth in the S&P 500.
The S&P 500 index is a stock market index that measures the performance of
Geeta Gupta-Fisker, the company’s co-founder and chief financial officer, said in June at the Barron’s Investing in Tech virtual conference that she believes an inflection point will occur around 2025, when electric vehicles will become more appealing to most buyers than traditional, gas-powered vehicles. Fisker, which has yet to make a sale, released its first-quarter earnings in May, and the results were solid enough to alleviate selling pressure on the stock.
In October, Fisker and Magna (MGA) agreed to develop Fisker’s Ocean electric SUV. Magna obtained stock warrants that would completely vest in thirds when three milestones were met as part of the arrangement. At a 1 cent exercise price, the warrants can be utilized to buy a total of 19.5 million Fisker publicly listed Class A shares. The warrants are valid until October 29, 2030. Magna had fulfilled the first milestone, which included establishing an Initial Manufacturing Agreement, on April 12, and warrants representing 6.5 million shares had vested. The second milestone was achieved on June 12 when a Fisker entity negotiated a Detailed Manufacturing Agreement with a Magna affiliate, and warrants representing another 6.5 million shares vested.
Subscribe to our newsletter Review & Sneak Peek Every weekday evening, we summarize the day’s most important market news and explain what’s likely to matter the next day.
Magna currently has vested warrants to buy a total of 13 million Fisker Class A shares, for a 7.4 percent holding based on 175.9 million trading shares outstanding. Magna had now surpassed the 5% ownership level, necessitating disclosure to the Securities and Exchange Commission. “We issued a filing recently that revealed that we held 12.97 million warrants of Fisker, which if exercised would represent 4.2 percent of all shares, and 7.4 percent of the Class A shares,” Magna said in response to a request for comment. This position is in line with what we expected at this point and indicated when we launched our partnership with Fisker.” “Magna’s filing last week indicates the vesting of the first two tranches,” Fisker added. The filing mentions a 7% ownership stake, but does not include Fisker Class B shares in the denominator. Magna warrants, ultimately exercised, would represent around 4% of Fisker total shares if Class B shares are included.” Fisker’s nontrading Class B shares have ten votes apiece, whereas its publicly traded Class A shares have one vote each. Inside Scoop is a frequent Barron’s feature that follows stock transactions by corporate executives and board members, as well as significant shareholders, politicians, and other notable persons. These investors are required to report stock trades to the Securities and Exchange Commission or other regulatory bodies due to their insider status. Ed Lin can be reached at ed.lin@barrons.com, and he can be followed on Twitter at @BarronsEdLin./n
Read More
