It could reasonably be claimed that 2020 is the year of the special purpose acquisition company, or SPAC. Right in the crosshairs of this trend is an unusual company called Tortoise Acquisition (NYSE:SHLL) and an equally unusual asset, SHLL stock.
As you might have guessed from the name, Tortoise Acquisition is a shell company whose purpose is to acquire another company in order to help it go public. In this case, the company that’s going public through the SPAC is known as Hyliion Holdings (NYSE:HYLN).
So, SHLL shareholders will have to face a major transition as that stock is being converted to Hyliion stock, which is trading under the ticker symbol HYLN. Moreover, Tortoise Acquisition CEO Vince Cubbage will join the board of directors at Hyliion, and Thomas Healy will retain his position as the CEO of Hyliion.
That’s a lot of information to absorb, I’ll admit. Plus, we haven’t even delved into Hyliion yet. Why is this company generating so much buzz on Wall Street? Have no fear, as I’ll break it down for you right now, starting with lowdown on Hyliion Holdings.
First-Day Jitters
With the Tortoise-Hyliion merger having completed, HYLN stock debuted on the New York Stock Exchange on Oct. 2. There was great anticipation surrounding the SPAC because Hyliion operates in the electric vehicle market.
That’s a red-hot industry in 2020, and SPAC’s are the latest trend in the electric vehicle space. Hyliion, which manufactures electric powertrains for commercial trucks, occupies a unique niche in this market.
Through the SPAC deal, Hyliion received around $560 million to drive its “continued development and the commercialization of its Hybrid and Hypertruck ERX electrified powertrain solutions,” according to the two merged companies.
That’s a whole lot of capital, but it didn’t translate into immediate gains on Wall Street. Thus, HYLN declined by more than 9% on its first day of public trading. Obviously, that’s not an auspicious start. Yet, it’s just one day, and as they say, one day doesn’t make a trend.
What SHLL Stock Investors Need to Know
Clearly, SHLL stock or HYLN stock isn’t really about the shell company. It’s about Hyliion’s grand ambition, which is to de-carbonize commercial transportation throughout North America.
Therefore, if you’re going to invest in this stock, you’d better familiarize yourself with Healy’s vision for Hyliion. The company’s been around since 2015 and seeks to establish itself as a leader in Class 8 truck electrification.
Hyliion’s unique product suite consists of hybrid and fully electric powertrain solutions. These, according to the company, are capable of achieving a net carbon-negative footprint.
Through this trucking technology, Healy seeks to enable Hyliion’s “fleet customers to quickly realize lower carbon emissions and significantly lower cost of ownership benefits provided by our technology.” But is this realistic?
Keep on Trucking
To help answer this question for prospective investors, I recommend visiting Hyliion’s web page dedicated to the Hypertruck ERX. This Class 8 truck model features Hyliion’s innovative fully electric drivetrain technology.
This drivetrain should quell any doubts about whether electric trucks can be as powerful as conventional trucks. Fully loaded at 80,000 pounds, the Hypertruck ERX can accelerate from zero to 60 miles per hour in 20 seconds.
Moreover, the Hypertruck ERX is capable of traveling over 1,300 miles, allowing the driver to charge its batteries en route. Re-fueling should only take around 10 minutes.
Plus, the drivetrain is central to the Hypertruck ERX’s ultra-efficiency. As the company points out, this vehicle’s “electric power generation is up to 35% less expensive than diesel on a miles per diesel equivalent gallon of fuel.” So, Hyliion’s leading-edge drivetrain tech allows the trucking industry to combine sheer power with deep cost savings over time.
The Bottom Line
Of course, there are other options in the electric-vehicle SPAC space besides SHLL stock or HYLN stock. Still, Hyliion’s proprietary drivetrain technology adds raw power to the trucking industry and, potentially, to your green-energy portfolio.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
