The SPAC boom continues. GigCapital3 (NYSE:GIK) is seeing shares move higher ahead of its announced move to bring Lightning eMotors public. This SPAC merger is highly anticipated. While a date is not yet announced, recent tweets have reignited interest in GIK stock. Currently, this stock is up more than 17%.
Let’s take a look at what all the hype is about, and whether this is a SPAC worth getting in right now.
GIK Stock Moving on Tweets
How investing has changed.
Social media has changed the investing game, forever it seems. Indeed, a single tweet has moved GIK stock significantly higher today.
This tweet, from Lightning eMotors’ Twitter (NYSE:TWTR) feed, shows a photo of an Amazon (NASDAQ:AMZN) delivery van with “100% electric” on the side panel. This has stoked speculative investment in this stock, as investors are gauging the scale of Lightning eMotors’ market as defined by its existing clientele and future potential partnerships. We do not know much about this photo though. We do know that Amazon is a customer of Lightning eMotors. However, a more formal Amazon partnership could be a catalyst that would take this stock higher.
— Lightning eMotors (@LightningeMtrs) March 1, 2021
Another tweet earlier last month regarding Lightning eMotors’ USPS partnership has perpetuated this conversation. Investors seem to be guessing right now as to the full extent of Lightning’s medium- to long-term business prospects. Thus, the speculative nature of this stock makes it an intriguing, and potentially volatile, trade today.
Should Investors Buy GIK Stock Today?
Investing in any company on a purely speculative basis is a high-volatility (high-risk) endeavor. Indeed, the high-volatility upside we’re seeing now with various SPACs has made these lucrative investments in recent years. Furthermore, today, shares of all EV companies appear to be catching a bid. Amid risk-on sentiment, these stocks are likely to perform well.
However, investors should remember that the underlying companies coming to market via SPAC mergers are typically untested companies in the development phase. Investors ought to be careful with portfolio allocation when it comes to any company still in the process of raising initial capital. The impressive upside we’ve seen with SPAC vehicles like GIK stock can go south quick in a risk-off environment.
A number of future events Lightning has set up may make clear some of the more murky details of the company’s business. Indeed, I expect investors to keep a close eye on commentary from Lightning’s management team. Any increased visibility into this stock has the potential to provide more volatility on the horizon. Thus, I’d recommend investors seeking exposure to GIK stock today to keep a close eye on any announcements that arise in the coming weeks.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.