Here’s a rule of thumb for investors looking for the next Tesla: Wait for the futuristic vehicles pictured in company presentations to hit the road.
Electric-vehicle startups are racing onto the stock market through special-purpose acquisition companies or SPACs. The latest is Faraday Future, which after years of financial troubles has finally bagged a deal to get its first luxury EV to launch next year. Shares in
, the blank-check company acquiring Faraday, have risen 42% since the announcement Thursday.
The happy couple join at least a dozen other EV ventures and SPACs that have announced similar mergers over the past half year or so. The deals have triggered trading surges and stock-market valuations ranging from speculative to incomprehensible, underpinned by the rally in Tesla’s even more highly valued shares.
Not all of the startups will compete head on with Tesla like Faraday and