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Why TPG Pace Beneficial Stock Crashed Today

By Howard Smith - Updated May 19, 2021 at 8:20AM

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The SPAC said closing a previously announced merger in the EV sector could be in doubt.

What happened

Shares of TPG Pace Beneficial Finance (TPGY 0.00%) dropped Tuesday morning after the special purpose acquisition company (SPAC) provided investors with its quarterly financial update. As of 11 a.m. EDT today, TPGY shares were down 12.2%. 

So what

Investors reacted to a filing from the company that brought into question whether its previously announced merger with electric vehicle (EV) charging network company EVBox would still go through. The issue stems from a delay from Netherlands-based EVBox in completing a required audited financial statement for 2020. That document must be complete before the companies file a registration statement ahead of the business combination. 

EVBox charging station with man getting ready to plug into his EV

An EVBox charging station. Image source: EVBox.

Now what

EVBox is the leading charging network in Europe, and says it is "actively expanding in the United States," with a dedicated U.S. sales force and a factory in Illinois. It has sold more than 235,000 charge ports, the most of any company. The merger bringing EVBox public has an outside date of June 8, after which either company is able to terminate the agreement. 

TPGY said the delay in the report will mean this outside date will not be met. It said completing the financial statement will take "significantly longer than previously anticipated," as the parent company of EVBox confirmed that "further review of certain accounting matters is necessary." 

TPGY said it does have the ability to push the outside date back to Sept. 6, and it plans to have further discussions on renegotiating the original terms of the merger. TPGY also said it has "significant doubts" that the transaction will be completed with the original terms, adding that it possibly will not be closed at all. 

Now that the merger is in doubt, or likely to be on different terms if it does go through, some investors aren't waiting for more clarity before selling today.

Howard Smith owns shares of TPG Pace Beneficial Finance Corp. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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