Despite the struggles and failures of many electric vehicle (EV) startups that merged with special purpose acquisition companies (SPACs) to go public, a new player has emerged on the scene. Thunder Power Holdings, a startup based in Taiwan, went public on the Nasdaq exchange in June through a SPAC merger, and is now attempting to raise up to $100 million more through a share sale deal.
The CEO’s Troubles
However, the story takes a surprising turn when it comes to Thunder Power’s CEO, Wellen Sham. In 2022, Sham was indicted by the Taiwanese government on 11 criminal charges related to his role as chairman of Electric Power Technology Limited, another company where he holds significant shares. The case is now before Taipei’s District Court Criminal Division.
According to Thunder Power’s filings with the Securities and Exchange Commission (SEC), Sham is accused of using Electric Power resources to pay for a seminar hosted by Thunder Power, and giving instructions to issue a false press release with the aim of disseminating rumors or misleading information. The Taiwanese government has asked for Sham to be dismissed from his chairman position at Electric Power.
Thunder Power’s History
Interestingly, Thunder Power is not a new company. It was first introduced as far back as 2015 at the Frankfurt Motor Show, where Sham told Top Gear magazine that the company had moved into the homologation process after completing the concept phase. However, in its initial S-4 filing last year, Thunder Power admitted that it "has not produced a single electric vehicle." This was still true as of May this year, according to another amended S-4 filing.
At that time, Thunder Power stated that only prototypes existed, built by an affiliate based in China. Since its inception, the company has lost more than $35 million and reported no revenue. As of June 30, 2024, it had just $921,349 in cash.
The Financial Deal
After going public in June, Thunder Power struck a financial deal with Westwood Capital Group LLC, a New York-based firm that bills itself as an "investment bank delivering creative solutions to clients with complex financial needs." The deal allows Thunder Power to sell up to $100 million worth of shares to Westwood, which can then turn around and sell them on the open market.
However, there’s a caveat: Thunder Power can’t force Westwood to buy additional shares if the share price is below $1 prior to February 20, 2025, or lower than $1.50 per share after that date. Currently, shares are trading at less than $0.50.
The SPAC Merger
It’s worth noting that Thunder Power went public through a SPAC merger, which has been a popular route for EV startups to gain access to capital and go public quickly. However, the success of these mergers has been mixed, with some companies thriving while others have struggled or failed.
Conclusion
The story of Thunder Power Holdings raises questions about the viability of merging with SPACs for EV startups, especially when considering the troubled history of the CEO involved. As the electric vehicle market continues to evolve, it will be interesting to see how companies like Thunder Power navigate the challenges ahead.
Related Articles
- Uber CEO Dara Khosrowshahi resigns from self-driving truck startup Aurora’s board: Read more
- Inside the wild fall and last-minute revival of Bench, the VC-backed accounting startup that imploded over the holidays: Read more
- These fintech companies are hiring in 2025 after a turbulent year: Read more
