One of the hottest investment trends of the year has been SPACs — special purpose acquisition companies.
These are shell companies that raise money, then use those funds to acquire operational companies.
This year, SPACs have been doing lots of buying in the electric vehicle (EV) and battery space.
And for good reason — as our trend and technology expert, Matt McCall, writes below, “UBS predicts that one in six cars sold around the world will be electric. That would be 5X growth in five years!”
The EV/battery sector will be one of the biggest growth stories of this decade. Best of all, we’re at the beginning of this story, able to place our chips ahead of time.
Today, let’s turn to Matt to get more details on this megatrend.
Have a wonderful Thanksgiving weekend,
Next-Generation Batteries Are the New Hottest Investment
By Matt McCall
2020 will be remembered as the year of many things, most of which we’d probably just as soon forget.
But from an investing standpoint, we may well look back on 2020 as the year of the SPAC.
We’ve talked about SPACs before. It’s an acronym for Special Purpose Acquisition Company, which is a company that goes public to raise money and then uses that money to acquire another company … and bring it public.
It’s much easier, much cheaper, and much less risky than the traditional way businesses go public through an initial public offering, or IPO.
SPACs are doubly exciting for those of us who build wealth investing in the hypergrowth trends that are transforming our world.
That’s because there has been ton of interest in those trends, including one in particular. And we saw the latest big move just today …
In the last 24 hours (note: this originally published on 11/18), two SPACs completed their mergers. Both shot higher, and both are part of how our world will be powered in the future.
MP Materials (OTCMKTS:MP) completed its merger with Fortress Value Acquisition (NYSE:FVAC) yesterday, and the new entity began trading today. The stock (which was previously FVAC) gained nearly 5% and is now up close to 40% just in November.
MP is the largest rare earth materials producer in the Western Hemisphere. Rare earth materials are important because they are key to the future of battery technology.
EOS Energy Enterprises (NYSE:EOSE) began trading yesterday after its merger, and it surged 14.6% today to its best level ever. The company provides batteries that store energy generated from other sources, like solar.
And another battery-related SPAC also rallied today, even though its merger hasn’t quite happened yet. Kensington Capital Acquisition (NYSE:KCAC), which jumped more than 5% today, is merging this quarter with QuantumScape, which develops and supplies solid state batteries for electric vehicles. One of QuantumScape’s early backers was none other than Bill Gates, the founder of Microsoft (NASDAQ:MSFT) and one of the richest men in the world. Volkswagen (OTCMKTS:VWAGY) also backs the company, so expectations are high.
For much of 2020, we’ve seen a lot of action with SPACs and electric vehicles (EVs). Nikola (NASDAQ:NKLA) brought this 2020 trend into the spotlight back in June when it went public via a SPAC merger. As you may remember, the stock shot up an insane 900% in only one week after the announcement.
Since Nikola’s market debut this summer, at least 10 more EV-related companies went public via SPACs or announced the intention to merge. The flurry of interest in SPACS acquiring both EV and battery companies confirms the massive long-term potential I see here.
That’s why I put together a Solid State Battery Portfolio for my Investment Opportunities subscribers, and it’s now up 125% in the less than two years since I introduced it.
Quite simply, electric vehicles are the future of transportation — what I call Transportation 2.0. And the best news? The potential is still huge because the trend is in its very early stages.
Over the next five years, automakers plan to debut 200 new EV models. And by 2025, UBS predicts that one in six cars sold around the world will be electric. That would be 5X growth in five years!
But we can’t just snap our fingers and magically get these cars on the road. We need the infrastructure and the technologies to make them run properly. And that’s where the next-generation battery technology comes into play.
Without better battery technology, it will be difficult — if not impossible — for EVs to replace gas-powered vehicles. And solid state batteries look to be the big winner in this space.
With so much at stake, here’s my prediction:
Investors who get in on this breakthrough now — before it’s rolled out on a mass scale — have the opportunity to be a part of what could be one of the single largest creators of wealth of the last 25 years.
This isn’t something that might or might not happen. This IS happening, and the time to get in is now.
Until next time,