The Great SPAC crash has been conveniently swept under the carpet, and investors have lost billions of dollars.
Central bank’s easy money during the 2020 global lockdowns brought the worms, charlatans, out of the woodwork, with SPACs being just one example.
SPAC stands for Special Purpose Acquisition Company, or a blank check company, a shell company that goes public through an IPO to raise capital. SPACs aim is to acquire or merge with a private company.
So the theory goes, but in reality, SPACs have been a spectacular failure for the investing Joe Public, and that is putting it diplomatically.
Darren Winters points out that nearly every SPAC is circling the drain of bankruptcy today, with all SPAC stocks down by a massive 90%, is somewhat dubious and smells fishy.
Perhaps the great SPAC crash should be coined the great SPAC pump and dump scam.
What was the SEC doing during the easy money SPAC frenzy?
The great SPAC crash is a shining example of the Cantillon effect, where the central bank monetary policy redistributes wealth to the top of the pyramid, leaving the majority bag holding worthless assets and shouldering inflation.
The EV SPAC mania fueled by an era of central bank ZIRP and QE has ended in tears for practically all SPAC investors.
Here is a growing list of the Great SPAC crash companies either bankrupt or circling the drain with stocks down more than 90%
Electric Last Mile Solutions beats the record on SPAC going public to bankruptcy, doing it all in just 12 months!
Fool me once, shame on you; fool me twice, shame on me. These “investment vehicles” must be running out of investors.
Electric Last Mile Solutions filed for bankruptcy in June 2022, with investors losing 100%, only 12 months after going public via a merger with a SPAC.
Proterra, which produced a few electric buses, filed for bankruptcy in April 2023, 25 months after having gone public via a merger with a SPAC. It once had a market cap of nearly $4 billion.
Lordstown Motors, which claimed to make electric pickups and sold zero pickups, filed for bankruptcy in June 2023, less than three years after it had gone public via a merger with a SPAC, during which time it lied to investors to get more cash and stay alive.
The great EV SPAC crash continued into 2024
Fisker filed for bankruptcy in June 2024. The company also went public via a SPAC merger in October 2020 amid false promises and ridiculous projections. Fisker then burned $1 billion of investor cash to finance its EVs manufactured by contract manufacturer Magna Steyr in Austria. CEO Henrik Fisker had already driven his predecessor company, Fisker Automotive, maker of the plug-in hybrid Fisker Karma, into bankruptcy in 2013.
Lion Electric, a Canadian company that allegedly made electric trucks and buses, filed for creditor protection in Canada and Chapter 15 bankruptcy in the US in December 2024. It had gone public in the US via a merger with a SPAC in November 2020.
Canoo, a high-tech advanced mobility and energy company, filed for Chapter 7 bankruptcy in January 2025, four years after it had gone public via a merger with a SPAC in late 2020.
Canoo designed electric vans but sold zero and went bankrupt.
The Great SPAC crash spreads to EV powersource
Faraday Future Intelligent Electric [FFIE] issued a bankruptcy warning in May 2024 and withdrew its production forecast. It had gone public via a merger with a SPAC in July 2021.
Nikola, the maker of fuel-cell electric and battery-electric class-8 trucks that had gone public in June 2020 via a merger with a SPAC, finally filed for Chapter 11 bankruptcy recently, as long expected, and intends to liquidate by selling its assets through a bankruptcy auction.
Founder and CEO Trevor Milton was charged and sentenced to four years for lying to investors about the technology;
It settled fraud charges with the SEC for $125 million;
Its stock price had given it a valuation of over $28 billion shortly after it went public.
Nikola has lost $3.36 billion since 2019 in ever larger annual increments, on essentially no revenues.
The company recently said it has $47 million in cash, down from $202 million at the end of Q3, losing $200 million. For the three quarters in 2024, it lost $482 million. In 2023, it lost $800 million. Since 2019, it has lost $3.34 billion.
In August 2022, Nikola´s stock collapsed by 92% from its peak and acquired collapsed EV-battery maker Romeo, which was supplying batteries to Nikola. In the press release, Nikola said:
“Integrated commercial vehicle electrification platform is expected to lead to manufacturing excellence and expected annual cost savings of up to $350 million by 2026; reduce non-cell related battery pack costs by 30-40% by the end of 2023.”
Nikola was poor in profits but rich in BS.
Worst EV hustle Great SPAC crash
Mullen Automotive [MULN] went public via a SPAC merger in November 2021 and has lost $2.1 billion since then.
In April 2022, short-seller Hindenburg Research stated, “Mullen Is Among the Worst EV Hustles We’ve Seen in A Crowded Field of Contenders.” After massive stock splits, including a recent one last month, February 18, the stock value is so diluted that it is nearly worthless.
The list of great SPAC crashes is endless
VinFast Auto [VFS], a Vietnamese EV maker, merged with SPAC in August 2023. The shares exploded, ballooning its market cap of over $230 billion. But two months later, the stock had plunged 92%.
Lucid Motors [LCID] went public via a SPAC merger in 2021 and has lost $10 billion since 2020.
Polestar [PSNY] went public via a merger with a SPAC in June 2022 and started trading at $11, giving it a market cap of $23 billion. The stock is now at $0.21, down 98% from the peak.
Darren Winters points out, the great SPAC crash is a case study of what is wrong and why gold keeps making new highs.