But people are getting sued, even celebrities. I doubt that anyone on Wall Street – or any of the celebrities that promoted all kinds of SPACs – will go to jail over these pump-and-dump collapses. This is a mess even for class-action lawyers because now they cannot fish for a settlement with the company to pay their fees, but will have to fight for scraps in bankruptcy court. This was also when CEO James Taylor and Chairman Jason Luo, both co-founders, were forced out after an internal probe. The company’s auditors walked away in February. The company, which was working on urban delivery vehicles, has failed to file its 10-K annual report with the SEC, and it has failed to file its 10-Q quarterly report with the SEC. That was fast! Congratulations on the speed and on being first!

From SPAC merger to Chapter 7 bankruptcy in 12 months. So this is the first of many stocks in my Imploded Stocks column that will die. The ultimate shareholders – all the outstanding shares are always held by whoever, and these whoevers end up with worthless shares in their brokerage account that they cannot sell and will have to look at for years to come, unless they contact their broker and ask them to remove the shares manually. That stock will be delisted from the Nasdaq and then will trade over the counter where some jockeys are going to bounce it back and forth for a while, to then be abandoned and die. It’s down 98% from the high on J(data via YCharts): Upon the news, the stock kathoomphed 62% today from nearly nothing to almost nothing, to $0.20 a share, from $0.51 on Friday.

“Following the commencement of the Chapter 7 Case, a Chapter 7 trustee will be appointed by the Bankruptcy Court to administer the Company’s estate and to perform the duties set forth in Section 704 of the Code.” The Company is currently completing preparations for the Chapter 7 Case. “On June 12, 2022, following a comprehensive review with the assistance of the Company’s outside advisors, and upon the recommendation of the Company’s management, the Board determined that it is in the best interest of the Company and the Company’s stockholders, stakeholders, creditors, and other interested parties to commence the Chapter 7 Case. Meaning the company’s assets, if any, get sold to the highest bidder, and the lawyers and some creditors will get the proceeds, if any, and the stockholders will get to hold the bag and get nothing. Chapter 7 covers liquidation, not restructuring. OK, so now, we’re “into June,” and here comes the SEC filing about the company’s decision to file for Chapter 7 bankruptcy. No hard feelings, folks, this is just how the game is being played during bubbles, and someone always gets to hold the bag.” I wrote – because you just have to keep your sense of humor about these shenanigans – that “Electric Last Mile has the unique opportunity to be the first EV SPAC in this cycle to go to zero because its cash-burn machine ran out of cash. At the time, the company said that its cash would last only “into June.” That was fast! Congratulations on the speed and on being first! By Wolf Richter for WOLF STREET.Įlectric Last Mile Solutions, an EV startup that went public in June 2021 via merger with a SPAC, was featured on May 30 in my article on EV SPACs and IPOs that are already announcing that they’re running out of cash.

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