ChargePoint is revving up to come public. According to anonymous sources, the electric vehicle charging company is closing in on a reverse merger with Switchback Energy Acquisition (NYSE:SBE). Here is what you need to know about the red-hot ChargePoint SPAC merger.
First of all, what exactly is ChargePoint? To answer that, it is important to understand that ChargePoint sees itself as the backbone of the electric vehicle industry. If you want to swap out your clunker for an eco-friendly EV, you need somewhere to charge its battery.
That is exactly where ChargePoint comes in. California-based ChargePoint has long been expanding the charging infrastructure for electric cars. Importantly, it provides a variety of charging stations as well as a platform to help optimize EV charging. Since its founding in 2007, the company has rapidly grown. Now, it says someone plugs into the network every two seconds.
So what about the ChargePoint SPAC merger? It should be clear where the interest in this deal is coming from. We have seen electric vehicle companies come public in record numbers this summer — including Nikola (NASDAQ:NKLA), Li Auto (NYSE:LI) and Xpeng (NYSE:XPEV). As investors have chased up the actual automakers, many have started to see more value in the so-called picks and shovels.
ChargePoint helps investors embrace exactly that. With a charging network across North America, it and its rivals are key to boosting consumer adoption of electric vehicles. Add in the fact that long-term trends suggest consumers are more likely than ever to drive a green car, and ChargePoint should start to get even more business.
Details of the ChargePoint SPAC Merger
The most important thing to note here is that the deal is not final.
However, investors are confident we should hear an update on ChargePoint and blank-check company Switchback Energy Acquisition as early as next week. Such a deal could give ChargePoint a value above $2 billion. A recent funding round saw it come in just below $1.4 billion.
Switchback itself came public just over a year ago in an initial public offering that raised $300 million. The company is likely eyeing ChargePoint because of its prominence in the electric vehicle space, the broader trend toward electric cars and the fact ChargePoint has institutional backing. According to Reuters, the company has received support from Chevron (NYSE:CVX), BMW (OTCMKTS:BMWYY) and Daimler (OTCMKTS:DDAIF).
Keep a close eye on this deal. Electric car stocks are hot now, and the novel coronavirus is likely to make them even hotter. An increasing consumer shift toward sustainability and the environment could bring big bucks to the ChargePoint SPAC merger.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.