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3 Former SPACs Report Earnings: What Fisker, Velodyne Lidar, Virgin Galactic Investors Should Know

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Chris Katje
·2 min read
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One of the hottest sectors for investors in 2020 was SPACs. As the SPAC story continues in 2021, an important theme for investors and analysts to monitor is when recently merged SPACs report quarterly earnings.

Some SPAC mergers involve pre-revenue companies, so it could be important to monitor what the company is saying about its timeline and deal pipeline.

Here's a look at three former SPACs that reported earnings Thursday after the market closed.

Fisker: Electric vehicle company Fisker Inc (NYSE: FSR) reported for the first time since closing its SPAC merger in the fourth quarter.

The company said it remains on track to start production of the Fisker Ocean electric SUV in the fourth quarter of fiscal 2021. The vehicle has 12,467 reservations.

Fisker said retail daily reservations are up 400% since mid-October. Survey results from reservation holders show 70% of customers are current internal combustion vehicle drivers and 50% of customers drive a non-premium automobile.

The company highlighted a deal signed with Foxconn for the production of a second vehicle in the fourth quarter of 2023.

Fisker ended the quarter with $991.2 million in cash and no debt.

Related Link: 10 Top SPAC Picks For Investors To Consider In 2021

Virgin Galactic: Space travel company Virgin Galactic (NYSE: SPCE) reported fourth-quarter and full-year earnings after the close Thursday. The pre-revenue company highlighted some upcoming events for investors.

The company said it will roll out its second spaceship March 30. A rocket-powered spaceflight is targeted to occur in May.

The company also highlighted an upcoming flight with the Italian Air Force that will bring in revenue for Virgin Galactic.

As of Dec. 31, the company had over 600 reservations from “future astronauts” who will take flight with the company to space.

Velodyne Lidar: In 2020, Velodyne Lidar (NASDAQ: VLDR) became the first public pure play lidar company for investors.

The company reported fourth-quarter revenue of $17.8 million. The revenue figure was down from $19 million reported in last year’s comparable period due to COVID-19 manufacturing shutdowns and an inability to fulfill certain customer orders.

Velodyne shipped a record 4,237 units in the fourth quarter, including 718 solid state units.

Velodyne had full fiscal year revenue of $95.4 million.

The company has a pipeline of 194 projects as of Feb. 19 from 26 signed agreements. Velodyne said it has the opportunity for $1 billion in revenue from fiscal 2021 through fiscal 2025 based on signed agreements. A pipeline of potential contracts could be worth up to $4.4 billion in revenue.

Disclosure: Author is long shares FSR and SPCE.

Photo courtesy of Fisker.

See more from Benzinga

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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    (Bloomberg) -- Just a few days ago, equity bulls were saying that they weren’t too worried about rising bond yields. Rates were still low, they explained, and as long as the pace of increases was orderly, stocks would be fine.Thursday’s market turmoil may put an end to that argument.As 10-year Treasury yields added as much as 10 basis points, their total increase for February reached 40 points. That’s more than the 36-point threshold that Goldman Sachs Group Inc. strategists warned could cause trouble for stocks.Bonds tumbled in early afternoon amid a sudden wave of selling after demand cratered at the Treasury’s 7-year note auction. Equities reacted with a net of 1,739 stocks on a down tick at one point, the second-biggest selling bout this year. Highly-valued shares such as Tesla Inc. led the retreat, while the Nasdaq 100 plunged as much as 3.7%.Equity bulls had been brushing aside the risk of higher yields, saying it’s a vote of confidence in the economic recovery that bodes well for corporate earnings. But the rout in fixed income may signal some market adjustments where stocks can’t be spared. In a note earlier this month, Goldman strategists including Ryan Hammond and David Kostin said that stocks typically fall on average in a given month when rates increase by two or more standard deviations, which is 36 basis points in today’s terms.“This is analogous to a flash crash in Treasuries,” said Arthur Hogan, chief market strategist at National Securities Corp. “We’re finally seeing yields react to what’s likely to be better economic activity.”“When it happens at a ferocious pace,” he added, “then you have a disarray in the markets” because everyone is “making the assumption that this never stops.”Read more: Convexity Hedging Haunts Markets Already Reeling From Bond RoutFunds that rebalance on a monthly basis such as pensions may have contributed to the equity selloff while better-than-expected data on jobless claims added to investor angst over inflation and government stimulus, according to Larry Weiss, head of equity trading at Instinet LLC in New York.“It can create a bit of trepidation two ways: inflation, which the Fed chair has dismissed, but also support for the argument against a large, broad stimulus package,” Weiss said. “So it’s a general risk reduction, similar to what we saw at the end of January.”U.S. pension funds that rebalance on a monthly basis will need to sell about $16 billion of domestic stocks to return to prior asset allocation levels following the latest equity rally, according to estimates from Credit Suisse. The S&P 500 has advanced 5.6% this month versus a loss of 1.5% in the Bloomberg Barclays U.S. Aggregate Bond Index.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Texas Cities Fret as Power Bills Mount in Wake of Blackouts

    (Bloomberg) -- The power supply shortages that slammed Texas last week drove spot electricity prices sky-high for some locally owned utilities, with one town on the hook for more than $200 million and other municipalities anxiously awaiting their bills.Denton, northwest of Dallas, racked up at least $207 million in power purchases over the span of a few days, more than triple its entire electrical power costs for fiscal year 2020. It left the city of 140,000 without enough cash to keep buying power at market rates and said in regulatory filing it may need to borrow more money to cover the costs.Across the state, local utilities that were forced to buy power at prices as high as $9,000 a megawatt-hour when a deep freeze hobbled the state’s power grid are potentially facing outsize debts that could wreck their credit rating and linger on their balance sheets for years.“I continue to wait for other shoes to drop,” said Kit Konolige, a senior utilities analyst at Bloomberg Intelligence.Related: Texas Power Producers Blame ‘System’ Failures for OutagesCPS Energy, a municipally owned utility in San Antonio, said it expects its costs from the winter storm to be “substantial” and is considering ways to limit the impact on its 840,750 electric customers.“While fuel charges are normally passed on to customers, our team will pursue every financing tool within our ability to spread the financial impact over years,” the utility said in a statement. “Spreading out the costs, if approved, will minimize the impact to customer affordability, which is important since the community has already been through a very difficult time.”Fitch Ratings on Wednesday placed all retail and wholesale electric utilities operating within the Electric Reliability Council of Texas, the grid operator known as Ercot, on rating watch negative. It cited concerns regarding funding requirements and liquidity in the near term, and cost recovery and the potential for increased financial leverage over the medium term.The Kerrville Public Utility Board, a community-owned, not-for-profit electric company that serves 23,000 customers northwest of San Antonio, also said it is facing “significant and unexpected” energy costs.“KPUB is working to fully calculate the financial impact we are facing due to these events,” the utility said in a statement. “However, the exposure is very significant even though our utility has reasonable hedges in place to mitigate such cost spikes.”S&P Global Ratings placed Rayburn Country Electric Cooperative Inc. on watch for downgrade after it fully drew its $250 million syndicated line of credit, and entered into a $300 million bilateral line of credit with National Rural Utilities Cooperative Finance Corp.Some utilities, however, managed to dodge unexpected costs. San Angelo, a West Texas town on the outskirts of the Chihuahuan Desert saw a record-shattering 10.1 inches of snow on Feb. 1. But it had fixed price contracts before the storm hit. “The good news is, we were a city who did have a guaranteed contract,” San Angelo Mayor Brenda Gunter said.Still, many other local utilities remain unsure what the disaster cost them. Officials in Bridgeport northwest of Dallas said they have yet to received a power bill. The city owns its utility but has no generating capacity, so it buys its power from a unit of Exelon Corp.“Right now, I guess we’re in the dark,” said Chester Nolen, the city manager. “I don’t know if that’s good or bad.”Related: Texas Governor Wants to Mandate, Fund Power-Plant WinterizationFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • BlackRock Prefers Developed Markets Amid Climate-Change Fight

    (Bloomberg) -- BlackRock Inc. is ramping up its preference for developed markets because of efforts to combat climate change, and touting the risk for developing nations and their more carbon-intensive economies.Technology and health-care stocks will prove more resilient to the shift, and those industries make up a comparatively bigger slice of advanced markets, according to Jean Boivin, head of BlackRock Investment Institute, the research arm of the world’s largest asset manager. The energy and utilities sectors, meanwhile, may face structural challenges as investors become more climate aware -- weighing on high-yield debt returns as well as some developing-nation bonds, he added.“The climate transition will be a persistent driver of these returns going forward, so it needs to be reflected in our expectations,” Boivin said during a webinar Thursday. “The greener sectors that are at the forefront will have a significant edge.”BlackRock Chief Executive Officer Larry Fink has amped up his focus on climate change and efforts to ameliorate it. Earlier this month, the company -- whose trillions of dollars of investment money make it the world’s biggest shareholder -- told companies how it wants them to address climate risk.The money manager is challenging the notion that tackling climate change could drag on global economic growth, betting that a transition to a net-zero economy can lead to a cumulative output gain of nearly 25% over the next 20 years when compared to a scenario in which no changes are made to prevent climate change.“Sustainability creates both risk and opportunities,” Simona Paravani-Mellinghoff, BlackRock’s global chief investment officer of solutions within multi-asset strategies, said during the webinar. “I cannot emphasize enough how critical a step this is. We should monitor ESG exposure as we do with every other driver of portfolio performance.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.