Time is running out for investors to buy the shares of special purpose acquisition company Switchback Energy Acquisition (NYSE:SBE) ahead of its upcoming merger with electric vehicle charger operator ChargePoint Holdings.
Investors are clearly excited about the upcoming SPAC deal that will bring ChargePoint’s shares to the market. In anticipation of the deal closing by the end of December, the shares of SBE stock rose 154% in November and added a further 8% gain in the first week of December.
At just over $37, the share price of Switchback Energy is up about 280% in 2020. And there is every indication that the shares will rise further once ChargePoint’s SPAC deal is completed in the next few weeks.
Big Growth Ahead
One of the benefits of SPAC deals is that they enable retail investors to get in on IPOs before the shares of a company officially begin trading.
Whereas retail investors are typically shut out of traditional IPOs and can’t buy the shares of a company before they begin trading on a stock exchange, small investors can buy the shares of a SPAC company such as Switchback Energy before they merge with their intended target and morph into the new company. In this case the new company is ChargePoint.
Retail investors who buy SBE stock now will likely look back and be pleased that they nabbed the shares while they were trading under $40. That is because ChargePoint has a lot of potential as a company and is poised to grow in the future.
ChargePoint is expected to be valued at $2.4 billion when it begins trading on the New York Stock Exchange in late December. The California-based company sells charging-station hardware and also has recurring software and service revenue.
It currently operates the largest network of independently owned electric-vehicle-charging stations in the world. And ChargePoint has forecast that its 2019 revenue of $145 million will swell to more than $2 billion by 2026.
Some analysts see that forecast as conservative given the massive, new infrastructure that will be needed to make electric-vehicle charging stations ubiquitous across the U.S. and around the world.
ChargePoint currently controls 73% of the 240-volt EV charging stations in the North American market. And the company is now rolling out its charging-station infrastructure in 16 European countries.
Switchback Energy has said that investments in EV charging station infrastructure in the U.S. and throughout Europe are projected to be about $60 billion in 2030 and close to $100 billion by 2040. For investors, that adds up to big growth.
Signing Partnerships
In addition to benefiting from burgeoning demand in the electric-vehicle market, ChargePoint is also forming smart partnerships with leading companies and brands. These include lining up reseller agreements in neighboring Canada and beyond, striking a deal with Swedish automotive giant Volvo (STO:VOLV-B) to provide customers of Volvo with ChargePoint’s home-electric vehicle charging system, and partnering with Apple (NASDAQ:APPL) on an innovative way for electric-vehicle owners to recharge their car, truck or SUV from ChargePoint stations using the Apple CarPlay app.
These deals demonstrate the ways in which ChargePoint is thinking outside the box and innovating to help advance the worldwide electric-vehicle revolution.
CNBC market commentator Jim Cramer recently said that he sees a lot to like about ChargePoint and its operations, noting that although the company’s hardware sales grew by only 9% during the global pandemic, its recurring revenues from software licensing agreements and services surged 39% gain in 2020. ChargePoint should be in decent financial shape as the U.S. economy emerges from Covid-19.
Buy SBE Stock Ahead of the ChargePoint IPO
While electric-vehicle stocks seem to be “a dime a dozen” these days, ChargePoint is different. The company builds and operates the charging stations and related infrastructure that are desperately needed to increase electric-vehicle adoption around the world. ChargePoint is a great way to broaden one’s exposure to the electric=vehicle market without having to roll the dice on one of a dozen unproven electric-vehicle stocks.
SBE stock gives investors a chance to get in on ChargePoint’s stock market debut before the SPAC deal is completed. And, based on everything ChargePoint has working in its favor, it is a safe bet that the company’s stock will rise further throughout 2021 as the global economy rebounds and the green revolution in the U.S. takes off under the administration of president-elect Joe Biden. The best advice to investors is to get in on the ChargePoint SPAC deal while there is still time.
On the date of publication, Joel Baglole held long positions in SBE and APPL.
