- ChargePoint, Inc. deal may be delayed by weeks if too few shareholders cast votes
- Investors need to vote electronically or call their brokers/banks to vote
- Any shareholder can also call Morrow Sodali LLC at (877) 787-9239 for help voting
- Voting is free but many investors are unaccustomed to the mechanics
- Deal has 99.86% support from those who have voted
- SPAC’s share price has quadrupled, indicating overwhelming support for deal
There can be no doubt about investor enthusiasm for ChargePoint, Inc. Any yet if too few shareholders cast votes – electronically or by phone – the deal could face serious and unnecessary delays.
Shares of Switchback Energy Acquisition Corporation (NYSE: SBE) have quadrupled to about $40 since September when the SPAC announced a deal to merge with ChargePoint, a leading electric vehicle (EV) charging network. What’s more, the company secured a large PIPE investment from institutions including Baillie Gifford and Neuberger Berman, indicating the total cash requirement is almost certainly satisfied.
The trouble is that a large percentage of outstanding Switchback shares (which will convert automatically to ChargePoint shares once the deal closes) are held by individual investors who may not be accustomed to voting for mergers or other matters that require shareholder approval. In the event the deal does not see enough shares voted, it could fail to reach quorum, causing weeks of delays.
The solution is for individual investors who have not voted to do so by contacting their brokers – be it Robinhood, Charles Schwab, Fidelity or any other – and vote their shares. In some cases, that can be done online and in others may require a phone call. In any event, it is free.
Shareholders of record as of December 16, 2020 should have received notice from brokers to cast a vote. But investors generally need to take an extra step actually get their votes on record – and cannot simply reply to an email.
Shareholders who have voted so far were 99.86% in favor of the transaction, according to a release from Switchback late Wednesday. So it appears there is virtually no resistance to the deal. It is, instead, almost certainly a matter of inaction on the part of individual investors.
Wall Street employs so-called proxy solicitors who help nudge institutions when it comes time to cast important votes. But it can be difficult to reach large numbers of smaller investors who use brokers like Robinhood, so many shareholders apparently remain unaware of the importance of their votes. Any shareholder can also call Morrow Sodali LLC, SBE’s proxy solicitor, at (877) 787-9239 for help voting.
The unusual situation has come about in part because of the rapid democratization of investing. In the past, it would be highly unusual for individual investors to play such an important role. These days, it’s become apparent that individual investors truly are necessary to get some deals done.
John Jannarone, Editor-in-Chief