Recently listed Microvast (NASDAQ:MVST) has become a hot-button stock investors are watching today. Indeed, MVST stock is one recent de-SPAC (special purpose acquisition company) that has only traded publicly for a little more than a week. However, it appears investors are finding new bones to pick with analysts over this battery-technology play.
As a result of Microvast’s reverse SPAC merger with Tuscan Holdings Corp., the battery maker was able to raise $822 million in cash. A PIPE (private investment in public equity) of $540 million combined with the cash in trust has provided Microvast with a war chest to go out and execute its business plan.
Microvast is an electric vehicle (EV) battery maker focused on developing and innovating the next-generation battery technology needed to power commercial and specialty vehicles. The company’s niche focus has made it an intriguing speculative pick for long-term investors. With a market capitalization of only $2.6 billion, Microvast could have significant upside from here. That is, should the company grow its market share in this growth sector of the EV market.
However, recent concerns about analyst price targets has caused quite the commotion with MVST stock. Let’s dive into what this Wall Street vs. Main Street battle is all about.
Analyst Downgrade Casts Doubt on MVST Stock
Morgan Stanley (NYSE:MS) analyst Adam Jonas just initiated coverage on Microvast. His conclusion? A price target of $6 and an underweight (equivalent of a sell) rating.
This price target implies roughly 30% downside from current levels and is significant for two reasons. First, Mr. Jonas is a respected analyst, and his ratings carry weight. He’s been a skeptic of hypergrowth stocks in the past, a view that hasn’t proven to be right, at least yet.
As it turns out, MVST stock has become a growth stock many retail investors seem to like. While not yet a meme stock, the retail trading community has gone on Reddit to slam this analyst report. It appears many investors are not enthused with this rating and point to previous hypergrowth sell ratings given by Jonas as reasons to buy this stock.
Accordingly, it’s interesting to see MVST stock rally more than 5% today on this downgrade. It appears retail investors are showing up in droves to support this early stage battery maker. Indeed, it appears short sellers aren’t the only folks the retail investing community is at war with these days.
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.
