Stocks associated with special purpose acquisition companies crashed in 2022—with an exception:
Freyr Battery.
The shares are up some 34%, year to date, despite stumbling this past Monday after releasing earnings. The stock’s rise, in fact, has accelerated; it’s up 5% in the past month, and 80% over six months.
The Norwegian start-up had a third-quarter loss of 80 cents per share; Wall Street was expecting 30 cents. Most of that loss, however, was an adjustment in stock-warrant valuation that depends on factors including share price. Freyr went public in July 2021 through a SPAC merger and aims to make rechargeable lithium-ion batteries for electric vehicles and energy storage. It has no sales and is still validating technology and building battery capacity. The company ended the quarter with $420 million in cash, after burning through roughly $145 million this year.
Freyr is in development mode, recently announcing a Georgia site for a U.S. battery plant, Giga America (“giga” has become synonymous with battery and EV manufacturing facilities) and signing sales and partnership deals. Bloomberg also reported that Freyr was talking to
KKR
about a $500 million investment.
Freyr is an outlier. Shares of the Defiance Next Gen SPAC Derived exchange-traded fund were down more than 30% this year before liquidating in September. Battery start-up
QuantumScape
fell some 35% over the past six months; EV maker
Lordstown Motors
and autonomous-driving company
Luminar Technologies
are off 20% and 15%, respectively. Six analysts rate Freyr a Buy, with an average price target of $21.
Write to Al Root at allen.root@dowjones.com
Last Week
Week of the Hawks
Shares of
SoftBank Group
fell 13% after a third consecutive quarterly loss. Fake tweets on Twitter drove down stocks of
Eli Lilly
and
Lockheed Martin.
Berkshire Hathaway
took a $4 billion stake in
Taiwan Semiconductor Manufacturing.
Amazon.com
is laying off 10,000 workers, about 1% of its workforce. Target said shoppers pulled back;
Walmart
sales beat expectations. Producer price inflation slowed and retail sales rose, but Fed officials surfaced with hawkish warnings. On the week, the Dow industrials didn’t budge at 33,747.14; the S&P 500 slipped 0.69% to 3965.43; and the Nasdaq Composite lost 1.57% to 11,146.06.
Crypto Contagion
The global crypto industry struggled as liquidity evaporated, prices fell, and write-downs began in the wake of the FTX collapse. Crypto lender
Genesis
suspended withdrawals. FTX said nearly $500 million had disappeared. Former FTX CEO Sam Bankman-Fried tweeted, “There was too much leverage—more than I realized.” Enron liquidator John Ray took over as CEO and said the FTX failure was the worst he’d seen in 40 years.
Midterms’ Wake
Democrats won a Senate majority, with victories in Arizona and Nevada, and Republicans narrowly took the House. Former president Trump announced he was running again. GOP House members nominated Kevin McCarthy as leader. Florida Sen. Rick Scott challenged Majority Leader Mitch McConnell and lost. And Speaker Nancy Pelosi, 82, said she would step back as House Democratic leader.
Xi and Biden
President Biden, after a stop at COP27 in Egypt, attended the G20 meeting in Bali, where he spoke with China President Xi Jinping. A slight thaw was detected. In China, Xi’s government appeared to loosen some pandemic restrictions, despite promises not to, as Guangzhou crowds rioted over lockdowns. The government also offered a 16-point plan to aid battered property companies.
The Polish Front
Ukraine took Kherson as Russian forces manned defensive positions on the east side of the Dnipro River. Blowback from the defeat hit Moscow, some aimed at President Putin. Russia unleashed another wave of drone and missile attacks. A Russian-made missile hit Poland, but an investigation concluded it was a Ukrainian air-defense missile gone awry.
Annals of Deal Making
Elon Musk left the chaos that is Twitter to testify in Delaware Chancery Court over his $56 billion
Tesla
pay plan. Musk admitted making decisions without consulting the board and said he’d eventually find someone else to run Twitter. Meanwhile, so many Twitter workers took up his severance offer that he closed offices on Friday…Estée Lauder worked out a deal to buy fashion label Tom Ford for $2.8 billion…The Financial Times reported SoftBank CEO Masayoshi Son owes some $4.7 billion to the company.
Write to Robert Teitelman at bob.teitelman@dowjones.com
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