Amprius Technologies (NYSE:AMPX) closed its special purpose acquisition company (SPAC) merger with a Kensington Capital blank check firm and was briefly up 140% in its first 24 hours of trading. AMPX stock then closed near $10 before jumping to about $19 at one point in pre-market trading Sept. 16.
Amprius makes lithium ion batteries using silicon nanowire for the anode. The company says this can double a battery’s storage. Until now, the batteries have mostly been used in drones bought by the U.S. military.
It agreed in May to merge with a blank check company called Kensington Capital Acquisition IV. Amprius was expected to raise $430 million on a valuation of $939 million. The jump in AMPX stock implies a market cap of almost $2 billion. Amprius had previously raised $55 million in three funding rounds.
What Is Amprius?
Amprius was founded in 2008 and has patent protection for its silicon nanowire system, which replaces graphite in a battery’s anode.
The company’s biggest customers are the U.S. Army, who use its products for drones and electric aircraft, and Airbus SE (OTCMKTS:EADSY), the European jet consortium. Amprius now hopes to enter the electric car market. The technology is considered proven and highly rated.
Kensington, the SPAC sponsor, previously helped take Quantumscape (NYSE:QS) and Wallbox (NYSE:WBX) public. Both are involved in the electric car battery market. Both stocks are down on the year, as the market for capital has tightened.
Before the merger, Kensington announced it had an additional $15.25 million in private investment in public equity (PIPE) funding for the merger. PIPE investors get both a share of the new company’s stock and a warrant for a second share. These new warrants can only be exercised when the price of Amprius reaches $20 per share. The stock was selling at a little more than $15 per share after the market opened today.
What Happens Now for AMPX Stock?
Amprius is still a long-term speculation. Its entry into the public market previews its entry into the commercial market for batteries, which is very crowded. It’s an opportunity for small investors to get into an important leading edge technology, but success is far from certain.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.