As the end of the week draws near, blank-check company GigCapital3 (NYSE:GIK) is revving up. Its move higher in pre-market trading comes after some big acquisition news. It turns out GIK stock is riding higher ahead of the Lightning eMotors SPAC merger. So what do you need to know?
To start, the key part of the story is that GigCapital3 will soon be taking Lightning eMotors public via a reverse merger. Because Lightning eMotors has a role in the battery and electric vehicle market, GIK stock already looks hot.
With that in mind, here are 12 things to know about GIK stock and the Lightning eMotors SPAC merger:
- GigCapital3 first came public in May 2020 and started trading on the New York Stock Exchange.
- At the time, the company raised $200 million by selling 20 million units at $10 each.
- Cohen & Company, the anchor investor, contributed $17 million of the deal.
- Initially, GigCapital3 said it wanted to focus on technology, media and telecommunications businesses.
- Now, GigCapital3 says it will take Lightning eMotors public, and GIK stock is climbing as a result.
- This is because Lightning eMotors has proprietary vehicle control software, mobile charging solutions and other software integrations for EVs.
- Lightning says it is the only manufacturer that has a full line of battery and fuel cell zero-emission commercial vehicles on the road.
- It serves a total addressable market of $67 billion.
- Importantly, its customers include Fluid Trucks, ABC Companies, ACE Parking and California State Hospitals.
- Lightning eMotors will reach production of 20,000 medium-duty EVs by 2025.
- Additionally, the company will reach revenue of $63 million in 2021 and predicts $354 million in revenue for 2022.
- The pro forma implied equity value of the merger is $823 million.
GIK Stock and the Lightning eMotors SPAC Merger
Investors are clearly excited about GIK stock and the Lightning eMotors SPAC merger. Following the announcement of the pending acquisition, GIK stock is now up 15% in pre-market trading. But what do investors really need to know? And why does this SPAC deal matter?
There is, of course, the broad trend we have seen in special purpose acquisition companies in recent weeks. The market has a huge appetite for new offerings, and SPAC deals and initial public offerings have largely flourished. Additionally, we know that the EV and battery markets are particularly hot. This is even more true following solid-state battery advancements from QuantumScape (NYSE:QS).
Specifically though, there is reason to find appeal in GIK stock and the Lightning eMotors SPAC merger. Right now, Lightning eMotors stands out because its vehicles are already in production. In fact, the company says it has the largest zero-emission fleet vehicle manufacturing facility in the U.S. It can produce 1,000 vehicles today, and plans to scale to 20,000 by 2025. For 2021, that figure should be closer to 3,000.
Additionally, Lightning eMotors currently has a backlog for 2021 and 2022 of 1,500 vehicles. Although this figure may not be huge, it gives Lightning an edge against still-in-development peers.
Keep an eye on GIK stock ahead of the Lightning eMotors SPAC merger. If we have learned anything from history, investors could keep bidding it up.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.