Another week, another special purpose acquisition company captivating investors. This time it is Qell Acquisition (NASDAQ:QELL), a relatively new name on Wall Street. But without any SPAC merger news, why has QELL stock been climbing higher?
To start, what do you need to know about Qell? Well, the blank-check company began trading on the Nasdaq Exchange in September. At the time, the company raised $330 million by selling 33 units at $10. That IPO was larger than many investors anticipated. Importantly, like with many other SPACs, there is not much else that we know for sure. However, we do know that Qell Acquisition is under the leadership of former General Motors (NYSE:GM) executive Barry Engle. Additionally, we know that the company is interested in the next-generation mobility and transportation industries. That makes any potential SPAC merger news rather exciting.
And in fact, that is where the recent move higher in QELL stock has come from. Shares closed out Friday higher by 13.4%. Now, in pre-market trading, shares are up once more. Although investors have no real news, one piece of speculation is powering a major rally.
So what are investors betting on? Well, late last week, one Seeking Alpha contributor highlighted how it could make sense for Qell Acquisition to take Proterra public. After that, thoughts of a Proterra SPAC merger have been working magic on the QELL stock price. This is because Proterra is one of the leading makers of electric buses and electric bus fleets.
Clearly, this is a powerful upside catalyst. But what really makes the thought of a Proterra SPAC merger so appealing?
QELL Stock and a Proterra SPAC Merger
As the Seeking Alpha contributor lays out, Proterra has continued to improve its production capabilities and expand its footprint. After launching in 2004, the company delivered its first all-electric bus in 2009. Since then, it has delivered more than 1,000 buses. Plus, the company also stands out thanks to its battery technology and its claim to the longest-range all-electric bus. As many investors flock to plays on the electrification of mass transit like Arrival, Proterra looks like a nice rival. Additionally, the company has fleet capabilities and is working on a last-mile delivery vehicle with Freightliner.
But is there any real logic in betting on QELL stock for a Proterra SPAC merger? Sort of. Earlier in October, Engle acknowledged that Proterra could be a good target for a SPAC. Broadly, we also know that electric vehicle companies are continuing to choose the SPAC route. On that note alone, it certainly would not be surprising to see another EV bus maker come public.
However, beyond that, investors are chasing up QELL stock on speculation. As the Seeking Alpha contributor acknowledges, they had previously bet on Proterra coming public through Hennessy Capital (NASDAQ:HCAC). With that SPAC now bringing Canoo public, it is clear that anything can happen. So what should you do? Well, if you like the idea of a Proterra SPAC merger, keep your eye on this up-and-coming SPAC play.
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.