It took less than 15 minutes Monday for Hyliion Inc. to graduate from struggling startup to a fully funded maker of zero-emissions electric drivelines for the trucking industry listed on the New York Stock Exchange beginning Thursday.
The process also made 28-year-old founder Thomas Healy one of the county’s youngest billionaires, worth more than $1.5 billion based on intraday trading of Tortoise Acquisition (NYSE: SHLL), which will change to the ticker HYLN in a few days.
The backstory on the Tortoise-Hyliion merger
Vince Cubbage dropped everything to make a deal when he saw the business plan needed no invention.
Hyliion makes an electric axle that converts diesel-powered trucks to electric hybrids. But its next product, the Hypertruck ERX, will create electricity from a natural gas generator. When running on renewable natural gas made from organic waste, the ERX will emit negative carbon emissions.
Tortoise Acquisition selected Hyliion from about 200 companies it considered as merger candidates.
Execution is key
“The key to Hyliion’s business plan is execution,” Tortoise Acquisition Chairman and CEO Vince Cubbage told FreightWaves. “It doesn’t require something new to happen that falls in its direction. When we saw this business plan and its path to mass production, we dropped everything and tried to get a deal with Healy.”
Tortoise Acquisition said it will file an 8-K document with the final vote totals on the Hyliion merger within four days. Monday’s vote was based on about 54% of the eligible shares being voted.
Tortoise is in the process for another special purpose acquisition company (SPAC). That begins with an initial public offering and can extend to raising more money through the sale of discounted shares, such as the $325 million raised for Hyliion.
All the rage
SPACs are all the rage on Wall Street this year, with 112 of them filed as of Friday. That is almost twice as many as of all of 2019.
A SPAC cuts about six months off the time it takes for the traditional IPO process. And they are subject to fewer restrictions. Young companies can talk about their forward projections for sales and profit and lay out their business plans directly to investors rather than working through investment banks to get institutional investors.
The downside is that depending on the underlying business, retail investors can drive shares to dizzying heights, only to see the shares fall dramatically.
That is what is happening with startup electric truck maker Nikola Corp. (NASDAQ: NKLA). Three days after its public debut following a SPAC merger in June, shares traded intraday at $93.99. On Monday, two and a half weeks after a blistering report from short seller Hindenburg Research and the Sept. 21 resignation of founder and Executive Chairman Trevor Milton, Nikola shares traded at $18.94.
Related articles:
Hyliion takes reverse merger path to public trading
5 Hyliion questions with former DOT secretary Andy Card
7 questions with high-flying Hyliion CEO
Click for more FreightWaves articles by Alan Adler.