Today begins a slower week for IPOs, but one exciting debut is quickly approaching. Swedish automaker Polestar announced a partnership with Gores Guggenheim (NASDAQ:GGPI) this morning, and GGPI stock already shot up. For investors, especially those interested in the electric vehicle boom of the past year, the Polestar SPAC merger is certainly one to watch.
It’s not surprising that markets would react well to news of a merger like this. GGPI stock has spent this month mostly in the green with only marginal downticks. Now with a Polestar merger on the horizon, there is plenty of reason to foresee a good quarter ahead. Once the merger closes, the newly minted company will trade on the Nasdaq under the symbol PSNY.
What else do you need to know about these companies as the merger approaches completion? Let’s find out.
What to Know about GGPI Stock and Polestar
- The name Polestar comes from a Swedish racing team that originally operated as part of Volvo (OTCMKTS:VLVLY). In 2017, it split from the iconic automaker to become a separate company and produce only electric vehicles.
- Polestar is committed to staying in its lane. CEO Thomas Ingenlath has stated that the company does not intend to be a “Tesla killer.”
- The other parent company with ownership in Polestar is Geely, a Chinese auto giant with global reach.
- Polestar is currently at work on an SUV that will include the lidar system pioneered by Luminar Technologies (NASDAQ:LAZR). The company’s Iris lidar system provides an advanced censor that allows vehicles to “see their environment better.” The transportation technology startup’s shares have risen by more than 3% as of this writing. Additionally, the company itself is also backed by Alec Gores of Gores Guggenheim.
- Aside from being backed by Volvo Cars Group, Polestar can also boast that actor Leonardo DiCaprio is among its early investors.
- The merger includes a PIPE investment of $250 million from institutional investors.
- Pending no further complications, the finalization of merger year will likely net a valuation for Polestar of $20 billion. It represents the largest blank-check merger in the EV sector since Lucid Motors’ (NASDAQ:LCID) $24 billion dollar deal with Churchill Capital IV earlier this year.
- Unlike Lucid, though, Polestar has already released multiple vehicles and one model is significantly more affordable. It may not want to kill Tesla, but its Polestar 2 has been called the “the closest thing on the market today to a Tesla Model 3 competitor.”
- It’s not uncommon for the stock of a company nearing a merger to dip but so far, shares of GGPI stock have enjoyed day in the green, rising this morning and staying consistent with these early gains.
On the date of publication, Samuel O’Brient 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.