This morning, shares of Gores Guggenheim (NASDAQ:GGPI) stock started the day up 5% on news that shareholders have approved its merger with Swedish electric vehicle maker Polestar. The deal is expected to close later today.
Once the reverse merger is finalized, shares of Polestar will begin trading on the Nasdaq tomorrow under the “PSNY” ticker symbol. The combination of Gores Guggenheim and Polestar is one of the biggest SPAC deals of the year. Before today, GGPI stock traded at $10.84 per share, down about 7% year-to-date (YTD).
Shares of GGPI are down a little over 2% as of this writing. Here’s what investors should know moving forward.
What’s Happening With GGPI Stock?
In a media statement, Gores Guggenheim confirmed that its shareholders voted to approve the combination with Polestar which will bring the European EV maker to the public market. Approval of the SPAC deal was widely expected. Gores Guggenheim believes the deal will raise about $850 million in gross proceeds.
Polestar was first established in 1996 by Swedish automotive giant Volvo (OTCMKTS:VLVLY). The company is headquartered in Sweden but manufactures its EVs in China. Polestar has been developing electric vehicles since 2017, the latest of which is a performance roadster.
The reverse merger between GGPI and Polestar is one of the few large SPAC deals to happen this year. After a bustling 2021, the entire SPAC market has slowed markedly amid the global market downturn. Last year, a record 613 SPAC listings occurred on U.S. exchanges, raising a total of $145 billion. So far this year, there have only been 11 SPAC listings valued at $25 million or more. At least 73 SPACs that had planned to go public this year have since been canceled due to deteriorating market conditions.
Polestar’s listing gives investors access to an interesting opportunity, however. The company is an established EV maker outside the U.S. but not headquartered in China. Many EV enthusiasts see its focus on performance vehicles as a differentiator. Investors also like the fact a global automotive giant backs Polestar. All told, expectations are high for PSNY stock once it begins trading.
What’s Next for Gores Guggenheim
Investors still bullish on EV stocks can purchase shares of Polestar once PSNY stock starts trading tomorrow morning. Of course, shares of many EV companies are down this year, including market leader Tesla (NASDAQ:TSLA). But there is reason to believe that quality, well-run EV companies like PSNY will survive and thrive in the years ahead.
On the date of publication, Joel Baglole did not hold (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.