Electric truck manufacturer Lordstown Motors is the newest company to locate a price ticket to get to Wall Street through a merger with a blank check company.
Lordstown Motors, which plans to manufacture an electric van for advertising fleets called Endurance, announced Monday that it will be combined with an already publicly traded company called DiamondPeak Holdings Corp. part of 2021.
DiamondPeak shares rose by nearly 15% in early operations on Monday.
The merger is expected to close in the fourth quarter. Once completed, DiamondPeak will replace your call to Lordstown Motors and its to RIDE.
The transaction is the most recent transaction with the so-called special goal acquisition company. Private corporations are ignoring the most classic direction of going to Wall Street – selling shares through an initial public offering – in favor of mergers with an already public SPAC.
As a component of the deal, Lordstown Motors will get $500 million in investments from Fidelity, Wellington Management and Federated Hermes Kaufmann Small Cap Fund, according to budget controlled through BlackRock.
General Motors also said Monday that it is making a $75 million investment in Lordstown Motors as a component of the $500 million deal. Lordstown last year purchased a 6.2 million-square-foot plant in Lordstown, Ohio, which the automotive giant planned to close.
The plan for the Ohio plant has been debatable and has been criticized by President Trump.
Other corporations that have recently been made public through SPAC come with Virgin Galactic, DraftKings and Nikola, some other electric vehicle manufacturer.
A third electric vehicle company, Fisker, will also be made public through a merger with a SPAC called Spartan Energy. And electric trucking company Rivian recently raised $2.5 billion to compete with electric car leader Tesla.
As a sign of the boom in the electric car market, Tesla’s shares have skyrocketed more than 250% so far in 2020, as Elon Musk’s company continues to prove that it can be consistently profitable. This has led to the hypothesis that Tesla will soon be added to the S-P 500’s top-notch index.
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