Nightcap: After slashing delivery and revenue estimates, Nikola keeps rolling

Hydrow, a maker of rowing machines, is in talks to go public through a merger with Sandbridge X2 Corp. (SBII: $9.76), according to people with knowledge of the matter.

The companies are in discussions about a transaction that values the combined entity at more than $1 billion, some of the people said. Sandbridge X2 is in talks with prospective investors about raising a private investment in public equity, one of the people added. Terms aren’t finalized and it’s possible talks could fall apart.

Hydrow and Sandbridge representatives declined to comment.

Cambridge, Massachusetts-based Hydrow, led by Chief Executive Officer Bruce Smith, had been exploring options such as an initial public offering or merging with a special purpose acquisition company, Bloomberg News reported in June. The company, which offers live and on-demand workouts -- also sells heart-rate monitors, headphones, yoga blocks, resistance bands and foam rollers, its website shows.

Hydrow competes in the at-home fitness market against companies including industry behemoth Peloton Interactive Inc. Its investors include LVMH-backed private equity firm L Catterton; Rx3 Ventures, co-founded by Green Bay Packers quarterback Aaron Rodgers; Sandbridge Capital; Activant Capital and Winklevoss Capital Management, PitchBook data show.

Indonesia’s Traveloka is in talks with potential investors to raise as much as $400 million as part of its plan to go public through merging with a blank-check company backed by billionaires Richard Li and Peter Thiel, according to people familiar with the matter.

The fundraising, a so-called private investment in public equity, would be part of a deal to merge the Jakarta-based online travel startup with Bridgetown Holdings Ltd. (BTWN: $9.83) as soon as this year, said the people, who asked not to be identified because the matter is private. The merger is set to value the combined entity at about $5 billion, the people said.

The PIPE amount discussed is about $200 million to $400 million and could still change, the people said. A representative for Traveloka declined to comment.

Traveloka is seeking funds for growth as its expands its geographic reach and the range of services it offers. A successful merger with Bridgetown would make Traveloka one of the first Southeast Asian unicorns to go public through a special purpose acquisition company, or SPAC.

A private drugmaker aborted plans to buy back its own SPAC at a hefty premium, sending shares of Immunovant Inc. (IMVT: $7.01) plunging to an all-time low.

The withdrawal by Roivant Sciences Ltd. unwinds part of its plan to go public by selling itself to a special-purpose acquisition company, and then using the proceeds to reacquire full ownership of Immunovant, which it merged into another SPAC in 2019. Immunovant’s stock, which topped $53 last year, closed 26% lower.

Instead, Roivant said in a statement Monday, it bought roughly 17 million shares for about $200 million that will fund continued development of Immunovant’s treatment for autoimmune diseases. That pushes Roivant’s stake to 63.8% from 57.5%. It picked up those shares at $11.75 each, which Roivant said was a 15% premium to the recent average price. Roivant still plans to proceed with its own SPAC merger.

“Roivant and Immunovant explored a range of possible transactions over the past few months, including a potential acquisition by Roivant of the minority interest in Immunovant, and ultimately agreed on this significant investment,” Matt Gline, Roivant’s chief executive officer, said in the statement.

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Roivant’s original plan was the first known instance of a SPAC-on-SPAC deal, and it raised eyebrows earlier this year after it was outlined in filings. In a circular scenario, Roivant wanted to merge with SPAC Montes Archimedes Acquisition Corp. (MAAC: $9.90), after which it planned to re-acquire Immunovant at a substantial premium that Robert W. Baird & Co. estimated could amount to $1.1 billion.

Nikola (NKLA: $10.21), the electric truck startup that went public via a SPAC merger, warned Tuesday that supply chain constraints are causing numerous delays forcing it to slash its vehicle delivery projections in half.

The company, which is still in pre-production, said in its second-quarter earnings call that its plans to produce 50 to 100 electric semi trucks in this year have been lowered to 25 to 50 units. The less than rosy projections continued on the revenue front.

The company cut its revenue forecast for the year to $0 to $7.5 million. It was previously $15 million to $30 million.

Nikola reported a net loss of $143 million in the second quarter, up from a $115.7 million loss in the same period last year. Its adjusted loss was 20 cents per share, which is actually better than analysts expected. The company’s cash balance at the end of the quarter was $632.6 million.

While the company focused its earnings call on its progress toward producing electric trucks — which included testing pre-production vehicles and completing 0.5 Phase of its factory in Arizona — the market was more interested in its lowered outlook and the lingering effects from its founder Trevor Milton being charged with securities fraud. Among the company’s updates is that it has built 14 pre-production vehicles, five alpha and nine beta prototypes.

Shares of Nikola were down 7.47% in midday trading.