How a 28-yr-old became a ‘blank-cheque’ billionaire during Covid WHAT’S THE SPAC CRAZE ALL ABOUT
Thomas Healy was secretly arranging a deal to turn his Texas-based truck electrification startup into a publicly traded company when the coronavirus pandemic struck.
The crisis halted many transactions, but not the one between special-purpose acquisition vehicle Tortoise Acquisition and Hyliion, which Healy founded in 2015.
The company created from the merger —Hyliion Holdings — began trading Friday in New York after shares in Tortoise surged more than 300 per cent ahead of a shareholder vote last month. Healy's stake is now worth more than $1.4 billion, making him one of the world's youngest self-made billionaires. Still, the 28-year-old knows luck was involved.
"We were fortunate on timing," said Healy, the firm's chief executive officer. "If we were trying to close right when the stock market was on that downswing, we might have been having different discussions."
There is growing scepticism of the blank-cheque phenomenon as such deals have proliferated in recent weeks. SPACS are now getting scrutiny from the US Securities and Exchange Commission, which wants to ensure investors are receiving appropriate disclosures about insiders' pay structures.
Hyliion slipped 0.9 per cent to $39.16 on Monday after slumping 12 per cent in its first full day of trading on Friday.
How did you start Hyliion?
Growing up, I raced cars. I spent a tremendous amount of time at racetracks driving vehicles. Our equipment was shipped in tractor trailers, so I got to know about trucks through that. Then when I was in college, studying mechanical engineering, I had an interest in electric vehicles. Tesla was just starting to become known then, and I thought: Why do we have electric technology in cars and not in trucks yet, since trucks are where you can have the biggest impact? They drive 100,000 miles a year and there's still a lot of greenhouse gases that come from them. So it was this thinking of, let's take this mega trend, a shift to electrification.
▶ Special purpose acquisition company (SPAC) is called a blank-cheque firm
It is a shell firm that has no operations but plans to go public with the intention of acquiring or merging with a firm utilising the proceeds of the SPAC'S IPO
Nikola was the first to kick it off this year; it went public in a reverse merger with Vectoiq Acquisition, a SPAC created by former General Motors
Virgin Group founder Richard Branson, in September, became the latest billionaire to join the rush of firms raising money for blank-cheque firms
▶ 112 SPACS have raised more than $40 billion so far this year in the US, according to SPAC Research