Today, investors in Faraday Future (NASDAQ:FFIE) and FFIE stock are seeing impressive gains. Indeed, shares of this electric vehicle (EV) startup have soared more than 6% at the time of writing on heavy volume.
This move comes on a rather intriguing catalyst today. As an up-and-coming player in the intelligent electric vehicle market, Faraday Future has had no shortage of catalysts in the past. EV stocks have continued to perform well, albeit in fits and starts.
However, as a company that came public via a special purpose acquisition company (SPAC) merger in July, Faraday Future has followed the trend in terms of de-SPAC companies trading below their SPAC initial public offering (IPO) price. Today’s rally of more than 6% in FFIE stock has brought this de-SPAC company to $9.57 per share, still approximately 5% below its IPO price.
That said, obviously some positive news is driving FFIE stock. Let’s dive into what investors are looking at today.
FFIE Stock Higher on Reported Palantir Investment
In a U.S. Securities and Exchange Commission (SEC) document filed last week, a key disclosure was made regarding Faraday Future’s SPAC IPO. A previously unreported tidbit of information was made public. Popular retail favorite Palantir (NYSE:PLTR) was part of the PIPE (private investment in public equity) financing portion of the merger. This investment was likely a significant chunk of the $795 million Faraday Future brought in as a result of this PIPE. Accordingly, investors bullish on Palantir appear to be taking a hard look at Faraday Future right now.
Palantir’s recent foray into investing in various venture capital (VC) companies has intrigued its investor base. On the one hand, Palantir investors gain more exposure to the technologies of the future via an investment in PLTR stock. On the other hand, this move into the VC space also makes Palantir stock more volatile. For speculators, this is a great thing. For conservative long-term investors, perhaps not so much.
That said, this PIPE financing arrangement comes with explicit benefits for Palantir investors. As part of the financing deal, Faraday Future agreed to use Palantir’s data-mining software. Such an agreement appears to be a win-win for both companies. Faraday Future is looking to lead the charge in the intelligent vehicle market. Being able to transform large amounts of data into actionable insights is an important piece of the puzzle.
Today, investors in both stocks seem to like the disclosure. Shares of both Faraday Future and Palantir are up significantly today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
