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LiveWire Hits the Stock Exchange


We don't cover a lot of hard business news here, but this caught my attention and imagination. Harley-Davidson has split off their electric vehicle division, LiveWire, and launched the company as a stand alone entity on the New York Stock Exchange (NYSE) last week. I wondered why and what it actually means, so I did a bit of digging.


Following the decision for LiveWire to split from the parent company, Harley partnered with what's called a Special Purchase Acquisition Company, also known as a SPAC or a blank cheque/check company, to float LiveWire. SPACs are companies formed simply to create a new business. They are run by investment companies, sometimes with celebrity involvement, to raise profile, but not on this occasion. The SPACs don't have a history or a product. They are created by investors betting on the success of a launch, in this case LiveWire. The name of the SPAC that has merged with Harley is and AEA-Bridges Impact Corp. This partnership was a $1.77 billion deal.


Harley split off LiveWire and went 'public' with it to raise funds and profile, and allow LiveWire to flourish, or fail, without affecting, or being affected by, Harley's core business. They offer shares to anyone in a position to buy them: professional investors, pension funds, the general public..., while Harley themselves are retaining a 74% share of the company. Because HD and the SPAC they partnered with owned 100% of LiveWire before they sold their shares, all the income from the shares goes to them, less tax and costs. The money raised by last week's initial public offering (IPO) was reported to have raised a net profit $295 million, where other sources have quoted a gross income from shares of $334 million. Bloomberg reported that was much less than the $545 million they hoped for, blaming a current slump in the market. That figure of $295 million is more than the $226 million Tesla raised from their IPO in 2010 (not counting for inflation). Tesla's share price went up over 4000% in the company's first ten years, though no one is saying LiveWire's will do the same.


These funds are in addition to a $100 million in investment from Taiwanese bike company Kymco, first reported at very end of 2021, and most likely leading to a sharing of hardware and technology between the two firms.


DEL MAR ORDERS LAUNCHED

At the same time as all the stock exchange shenanigans, LiveWire announced they are taking orders for the full production run of their electric street tracker, the Del Mar S2. A launch edition, available only in the US market, sold out in under an hour, back in May. Deliveries for the production model are expected in Spring 2023.


The original LiveWire, the S1, did create interest, and won acclaim among testers, but has been a sales flop, its $/£/€ 20,000+ price tag putting off all but the wealthiest or committed of early adopters. Reports say the company has sold fewer than 400 LiveWire S1s. The Del Mar is a more affordable $17,000. Still a lot for a bike, but comparable to lots of current production bikes.


Harley say, in rather a vague manner:

• Performance highlights include expected outcomes at production of output of 80

horsepower (59.6 kW), 184 ft-lb of torque, 75 minute 20%-80% recharge time using L2,

and 431 pounds (195kg) of weight, delivering projected 0-60mph times of 3.1 seconds.

• Del Mar range in city riding is targeted to be 110 miles. *


The words expected and targeted are important. These are not facts, or even claims yet, just targets.


Still, I think it looks great. More on the LiveWire in the future.


#LiveWire #Harley #Electric