- GGPI stock is still flat around the $10 cash level.
- SPAC stocks hold $10 in cash to return in the event of a failed deal.
- GGPI is due to take EV maker Polestar public.
SPAC stocks are not what they used to be, and certainly a prime example of that is Gores Guggenheim (GGPI). While it did receive some meme-like attention in the past, it never soared to the heights of other more notable SPACs such as Lucid (LCID) and Virgin Galactic (SPCE). Perhaps the lack of visibility in the US was a contributing factor, but regardless 2022 has not been kind to SPAC stocks. All have been tarred with the same negative outlook. Perhaps harsh on GGPI, but considering I am long, I do have some confirmation bias.
GGPI stock news
June 22 was recently announced as the date when GGPI holders will get to vote on approval of the merger deal to take Polestar public via SPAC. GGPI holders can vote in advance of June 22. As a brief overview, Polestar is an electric vehicle manufacturer owned by Volvo and Volvo's parent Geely. My investment thesis is based on the fact that Polestar will piggyback on Volvo's manufacturing and service networks. This will eliminate the need for large investments and capex. It will also mean a quick route to market for Polestar.
Also one of the main reasons for my continued investment has been the backstop at $10. SPACs are required to hold cash to the tune of $10 per share to return to shareholders in the event the deal does not complete, so for now there is little downside.
However, the EV sector has been facing headwinds from supply chain issues, inflation and lockdowns in China. Polestar recently reduced its delivery guidance for 2022 from 65,000 to 50,000. In April Hertz announced it has placed a major order with Polestar for electric vehicles. The car hire company ordered 65,000 vehicles over five years. Hertz hopes to have Polestar vehicles available this spring in Europe and later in the year in the US.
GGPI stock chart
There is not a huge amount of new information to see here. $10 is support, but the stock is trending gradually lower and the death cross looks imminent. This is not exactly comforting to my long thesis, but this chart is early stage and is not showing significant trends or levels just yet. So we live in hope!