What is going on with Cepton (NASDAQ:CPTN) stock?
Shares of the California-based light detection and ranging (lidar) tech company rocketed 200% higher. At one point this morning, shares were up another 300%! However, shares quickly started to reverse course after the opening bell. As of this writing, CPTN stock is down slightly less than 1%.
Cepton just recently closed its special purpose acquisition company (SPAC) merger with Growth Capital Acquisition. CPTN stock started trading on Feb. 10, and things really took off a week later.
So what is the reason for the major spike? Perhaps investors are excited about Cepton’s underlying business in the lidar space. This week also saw investors chase up Quanergy Systems (NYSE:QNGY), another lidar player.
Without any more specific news, here are five things to know about Cepton.
5 Things to Know About CPTN Stock
- Cepton makes sensors that are primarily used in self-driving cars.
- Investors may also be excited about its projected growth. Cepton says its revenue will increase from about $15 million this year to $250 million in 2024. However, the company doesn’t anticipate becoming profitable until at least 2024.
- In addition to self-driving cars, Cepton’s sensors are used in internet of things (IOT) applications, one of the hottest areas of the technology sector right now.
- The company is led by Jun Pei, who holds a doctoral degree in electrical engineering from Stanford University. The CEO is credited with developing the first optical and acoustical combination technique in semiconductor thin film measurement.
- Cepton received about $150 million less than it anticipated from its SPAC merger after holders of more than 90% of Growth Capital Acquisition’s shares asked to trade them in for cash. This follows a trend of increasing pre-merger redemptions.
What’s Next for Cepton?
It’s unclear what has been driving CPTN stock in recent days. It could be that the stock is being targeted by aggressive retail traders or it could be the result of excitement over the company’s market debut and future prospects.
What is clear is that it is highly unusual for any stock to jump more than 500% immediately after it begins trading on a stock exchange. Investors should proceed with caution.
On the date of publication, Joel Baglole 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.