Switchback Energy Acquisition (NYSE:SBE) isn’t your typical special purpose acquisition company (SPAC) and investors should take notice of SBE stock.
Switchback Energy is looking to bring a company public that is involved in electric vehicles. However, Switchback Energy’s target, ChargePoint, is not another electric vehicle maker. Rather, ChargePoint is involved in building the infrastructure needed for mass-market adoption of electric vehicles.
Specifically, ChargePoint is building the network of publicly available electric vehicle charging stations that will literally power the transition from gasoline-fueled vehicles to electric powered cars, trucks and sport utility vehicles (SUVs).
ChargePoint’s area of focus should pique the interest of forward-looking investors.
Looking Beyond Automakers
The electric vehicle market is about more than the glut of fully electric cars and trucks that are coming to market between now and 2025.
Electric vehicles replacing gas powered automobiles will require a robust build out of infrastructure. And charging stations are the key to success. The global electric vehicle charging infrastructure market is forecast to be worth $56.9 billion by 2026, and could be worth $190 billion by 2030.
Publicly accessible charging stations will need to become as common as gas stations are today if the electric vehicle revolution is to come to fruition.
ChargePoint, which is expected to begin trading shares by year’s end, is very well-positioned to capitalize on the charging station build out. The company says it has already developed more than 115,000 public and private charging locations around the world. Early investors in ChargePoint include BMW (ETR:BMW), Siemens (ETR:SIE) and Chevron (NYSE:CVX).
ChargePoint can provide investors with exposure to the fast-growing electric vehicle market without having to take on the risks associated with a young and unproven automaker that has yet to manufacture a single vehicle.
Sharply Higher Stock Price
The boards of directors at both Switchback and ChargePoint have unanimously approved the SPAC deal that will see the merged company called “ChargePoint Holdings.” The deal values ChargePoint at $2.4 billion, and ChargePoint has said that it plans to raise cash proceeds of about $700 million from the share sale, money it plans to use to repay debt, fund operations and support growth.
News of the SPAC deal has sent SBE stock sharply higher, rising 68% since the end of September. Investors are clearly expecting big things from the market debut of ChargePoint.
The ChargePoint deal also includes a public investment in private equity (PIPE) allocation. PIPE investors agree to put money into ChargePoint ahead of its stock market debut in exchange for receiving shares at a discounted price. The ChargePoint deal includes a $225 million PIPE allocation that has attracted interest from a number of institutional investors.
Buy SBE Stock Ahead Of ChargePoint Market Debut
There are many good reasons to invest in SBE stock ahead of the ChargePoint SPAC deal. Founded in 2007, ChargePoint is a leader in the critically important market for electric vehicle charging stations. ChargePoint is run by energy industry veteran Scott McNeill, who previously worked as an executive at oil and gas company RSP Permian.
Last year, ChargePoint generated $147 million of revenue. McNeill has said the company will use the funds raised from the SPAC deal with Switchback Energy to further expand in North America and Europe. ChargePoint expects to be profitable by 2023.
Investors should view purchasing shares in SBE stock as an opportunity to get in on the ground floor of ChargePoint. Given its pivotal role in the emerging electric vehicle market, it’s a safe bet to assume that shares of ChargePoint will generate strong returns for investors.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.
