Let’s be honest; special purpose acquisition company (SPAC) stocks, especially in the electric vehicle (EV) space, haven’t done well lately. A textbook example is Gores Guggenheim (NASDAQ:GGPI), as GGPI stock has fallen sharply from its peak.
Just to recap, Gores Guggenheim is reverse-merging with Swedish EV manufacturer Polestar. The transaction is still in progress, so the stock’s ticker symbol hasn’t changed as of early December.
As we’ll see, GGPI stock seems to have gone too high too quickly after the SPAC deal announcement. Hence, a recent share-price pullback was almost inevitable. Perhaps this is your chance to pick up some shares at a reduced price point. After all, Polestar just revealed a multi-year plan that ought to get investors revved up and ready to buy.
A Closer Look at GGPI Stock
Before we jump to the present time, let’s get everybody caught up. In late March, Gores Guggenheim went public with its initial public offering (IPO).
As you might expect with a pre-merger-announcement SPAC stock, GGPI stock stayed near $10 for a while. You can probably guess what happened after Gores Guggenheim disclosed its intention to reverse-merge with Polestar. Of course, the share price shot up like a rocket. To be more specific, the stock topped out at $16.41 on Nov. 15.
During the second half of 2021, there’s been a pattern of new EV stocks popping and then dropping. GGPI stock is a perfect example of this phenomenon, as it pulled back to $12 in early December.
I suppose you could wait until the stock retraces to $10, but there’s no guarantee that this will happen. $12 and change is a perfectly acceptable buy price, assuming you believe in Polestar’s ability to deliver in 2022.
Road Map to Success
Speaking of delivering, it appears that Polestar has major plans in progress.
In New York City not long ago, the company revealed a number of new initiatives which could disrupt the EV industry as we know it. The crux of these initiatives is Polestar’s three-year business plan. In it, Polestar expects to have five current and future automobile models available on the global market by 2024.
The company already offers a hybrid performance car called Polestar 1 and a fully electric Polestar 2. These are currently on roads across Europe, Asia, and North America.
However, the automaker revealed the luxury sport EV known as the Polestar 5 at the New York event. Furthermore, the company released a teaser image of the Polestar 3, which will apparently be a “luxury aero SUV.” That model will be built in America, while the other Polestar models will be built in China.
A Surprising Price Range
With that, Polestar CEO Thomas Ingenlath proudly emphasized the Polestar 3’s domestic production plan.
“Polestar 3 is planned to be launched in 2022 as a premium electric performance SUV that will define the look of SUVs in the electric age. It will also be the first Polestar vehicle to be built in America,” he declared.
Moreover, for anybody wondering when Gores Guggenheim will finally close the SPAC deal, we have some clarity on that. The reverse-merger deal with Polestar is expected to close during the first half of 2022. So, the wait won’t be too long now. In addition, Polestar plans to operate in 30 markets by 2023, and projects that its sales will reach 290,000 vehicles by the end of 2025.
As far as the pricing goes, Ingenlath provided a broad range which might surprise some people. Polestar’s vehicle offerings start at “around $40,000, actually below $40,000 with the Polestar 2,” and go “all the way up to a price ticket of $150,000,” according to Ingenlath.
“The cars that we’re launching now, Polestar 3, 4, and 5 in the next three years, will be positioned in this price span,” the CEO added.
The Bottom Line
So, now you have more details on Polestar’s current and upcoming lineup of next-generation EVs. Along with that, you’ve got the scoop on how high GGPI stock flew, and how far it fell from the peak.
If you like what you’ve heard so far, then feel free to consider a small but confident position in this ambitious EV start-up.
On the date of publication, David Moadel 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.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.