The Fisker Ocean.
Courtesy of Fisker
Electric-vehicle maker Fisker has a new big investor. Well, not entirely new because Magna International, an auto supplier that just reported a large stake in the EV stock, is an old partner.
Fisker (ticker: FSR) stock has soared 22.4% so far this year, compared with a 15.9% rise in the S&P 500 index. Geeta Gupta-Fisker, the company’s co-founder and chief financial officer, said at the Barron’s Investing in Tech virtual conference in June that she expects an inflection point around 2025 when EVs will become more attractive than traditional, gas-powered vehicles for most buyers. Fisker, which doesn’t have any sales yet, reported first-quarter results in May, and the numbers were good enough to ease selling pressure in the shares.
Fisker reached an agreement in October for Magna (MGA) to build Fisker’s Ocean electric SUV. As part of the deal, Magna received stock warrants that would fully vest in thirds with the completion of three milestones. The warrants may be used to acquire a total of 19.5 million of Fisker’s publicly traded Class A shares at an exercise price of 1 cent each. The warrants expire on Oct. 29, 2030.
As of April 12, warrants representing 6.5 million shares had vested, after Magna reached the first milestone, which included reaching an Initial Manufacturing Agreement. On June 12, a Fisker unit reached a Detailed Manufacturing Agreement with a Magna affiliate, achieving the second milestone, and warrants representing another 6.5 million shares vested.
Magna now has vested warrants that could be used to acquire a total of 13 million Fisker Class A shares, a 7.4% stake based on 175.9 million of the tradable shares outstanding. Magna now topped the 5% ownership threshold, so it was required to disclose the stake to the Securities and Exchange Commission.
In response to a request for comment, Magna provided the statement: “We made a filing recently that indicated that we own 12.97 million warrants of Fisker, which if exercised would represent 4.2% of all shares, and 7.4% of the Class A shares. This holding is consistent with what we expected to have at this point, and what we disclosed when we announced the cooperation with Fisker.”
Fisker said, “Magna’s filing last week reflects the vesting of the first two tranches. The filing notes 7% ownership but does not include Fisker Class B shares in the denominator of the calculation. If you include Class B shares, the Magna warrants, once exercised, would reflect about 4% of Fisker total shares.”
Fisker’s nontrading Class B shares each carry 10 votes, while the publicly trading Class A shares each carry one vote.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
