Lordstown Motors Corp prototype of the electrical car start-up’s Endurance pickup truck, which it should start constructing in the second half of 2021, is seen on the firm’s plant in Lordstown, Ohio, U.S. June 25, 2020.
Lordstown Motors | Reuters
Shares of Lordstown Motors surged practically 20% earlier than cooling off in the corporate’s volatile trading debut Monday on the Nasdaq.
The inventory jumped as excessive as $21.75 however was trading at $19.42, up 6.6%, as of 1:25 p.m. It started trading Monday after closing a reverse merger final week with DiamondPeak Holdings Corp., a particular goal acquisition firm, or SPAC.
Ohio-based Lordstown Motors is amongst a rising group of electrical car start-ups going public by way of offers with SPACs, which have turn into a preferred means of elevating cash on Wall Street as a result of they’ve a extra streamlined regulatory course of.
SPAC shares usually get an preliminary pop after the deal is introduced however are likely to underperform the broader market in the long term, based on Goldman Sachs. Shares of Hyliion, a hybrid and electrical industrial truck agency, have been minimize in half because it started trading after its reverse merger with Tortoise Acquisition Corp. in October.
Lordstown was anticipated to obtain about $675 million of gross proceeds from the deal. It deliberate to make use of the funds for the manufacturing of a brand new work truck referred to as the Endurance. Lordstown says it has secured 40,000 preorders for the truck, which might equate to $2 billion in income.
The firm plans to start producing the pickup starting subsequent yr at General Motors’ former Lordstown Assembly plant in Ohio. Lordstown bought it from the automaker final yr. Deliveries are anticipated to start in late summer season.
Lordstown expects to realize breakeven or higher operational earnings margins in 2022, its first full yr of manufacturing, and eclipse 10% by 2024.
DiamondPeak raised $250 million in its IPO in March 2019, with the corporate initially trying to goal a “business with a real estate related component.”
– CNBC’s Pippa Stevens contributed to this report.