Investors in special purpose acquisition companies have been keeping an eye on Gores Metropoulos (NASDAQ:GMHI). GMHI stock, which hit a high of $13.70 on Sept. 15, is currently trading around $10.50.
On Aug. 24, Gores Metropoulos announced a merger agreement with the privately held Luminar, which specializes in automotive lidar technology. When the reverse-merger closes, the new company will keep the Luminar Technologies name and its stock will trade on Nasdaq Exchange under the new ticker symbol “LAZR.”
The company’s partnership with Luminar is one of several SPAC investments The Gores Group has been working on. For example, in late September, their group announced another SPAC deal. Gores Holdings IV has agreed on a reverse merger with the privately held United Wholesale Mortgage, which will likely result in the largest SPAC deal to date.
This year has brought several sectors, including the automotive industry, into the limelight. Electric vehicle stocks and shares in companies that may advance autonomous driving have become darlings of the Street. Market participants may begin to feel the SPAC lane with an EV concentration is getting congested.
Therefore today, we will take a closer look at what investors may expect from this new company.
Why Automotive Lidar Technology Is Important
According to the American Geosciences Institute, lidar is a remote sensing method that uses light in the form of a pulsed laser to measure ranges.
A recent article co-authored by researchers from Daimler AG (OTCMKTS:DDAIF) and the Karlsruhe Institute of Technology (KIT) in Germany explains further: “Lidar sensors are often used in mobile robots and autonomous vehicles to complement camera, radar and ultrasonic sensors for environment perception.”
Further research highlights the importance of lidar sensors and says, “One of the main perception tasks of autonomous vehicles is the detection of objects in their surroundings. Functional safety makes it desirable to have multiple complementary and redundant sensors which perform the object detection simultaneously. The most common sensors used for advanced driver assistance systems today are camera, lidar, and radar.”
In other words, the technology in question is quite important in the development and mass commercialization of autonomous cars. Luminar, which was founded in 2012, has already made inroads in developing the necessary hardware and software for lidar technology to be used in the next generation of vehicles, including cars and trucks. In 2022, Volvo (OTCMKTS:VLVLY) will start using the technology in its global vehicle platform.
Should You Buy GMHI Stock Now?
CEO Alec Gores and Chairman Dean Metropoulos of Gores Metropoulos are both prominent private equity investors. Gores has recently commented, “We are excited to partner with a visionary founder like Austin who has developed from scratch the only lidar technology that meets the most stringent OEM specification requirements for safety and performance. Luminar is well positioned to dominate the autonomous landscape and together, we look forward to shaping the future of automotive transportation.”
InvestorPlace’s Louis Navellier concurs with Metropoulos, saying “For a company like Luminar, there’s a lot of money to be made. And that’s an exciting reason to invest in GHMI stock now.”
The GMHI share is currently hovering at $10.50. Potential investors who are interested in both SPACs and EVs as well as the lidar technology may consider buying the dips.
Those who are not ready to invest in GMHI stock may also consider researching a new exchange-traded fund, the Defiance Next Gen SPAC Derived ETF (NYSEARCA:SPAK). As the fund started trading on Oct. 1, it is still a young ETF with little data. The fund currently has 36 holdings. However, GMHI stock is not yet one of them.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. She also publishes educational articles on long-term investing.
