Online used-car seller Shift’s shares fall in Nasdaq debut

In this news, we discuss the Online used-car seller Shift’s shares fall in Nasdaq debut.

(Reuters) – Shares of Shift Technologies Inc fell 6.7% on their Nasdaq debut on Thursday after the online used-car seller went public in a reverse merger deal with the blank check company Insurance Acquisition Corp.

Shift shares were trading at $ 10.86 in morning trading, compared to Wednesday’s close of $ 11.66 by Insurance Acquisition.

Shift is part of a new generation of auto retailers who have harnessed online channels to do business without a handshake and ensure vehicles are picked up or delivered without customers going to stores.

“We were actually on track for great growth this year before COVID came along, but then the (pandemic) unexpectedly really turbocharged what we were doing,” co-CEO Toby Russell said in an interview.

In June, Shift agreed to go public in a reverse merger deal with Insurance Acquisition, a special purpose acquisition company, valued at $ 730 million. The deal was reached earlier this week.

Shift has raised more than $ 300 million through the deal, which it plans to use to accelerate growth in competition with rivals Carvana Co and Vroom Inc. The company counts Goldman Sachs among its investors.

A SPAC, or blank check company, is a shell company that uses the proceeds of an IPO to acquire a private company, which then goes public as a result.

Merging with a PSPC has emerged as a popular route for companies looking to go public, as opposed to a traditional initial public offering, as it involves less regulatory scrutiny and more certainty over market valuation and funds. lifted.

A number of high profile deals have been made this year, including those for sports betting platform DraftKings Inc and electric commercial truck maker Nikola Corp, both of which went public by merging with a SPAC. .

Report by C Nivedita in Bengaluru; Edited by Anil D’Silva

Original © Thomson Reuters Corporation

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