InvestorPlace – Stock market news, stock advice and trading tips
Wait, another special purpose acquisition company (SPAC) in the electric vehicle niche? This is a legitimate question to ask when investigating a front company Pivotal Investment Corporation II (NYSE:PEAK) and the company with which it merges, XL fleet. There have been a lot of SPACs in 2020, you might be wondering what makes stock PIC different.
Since it is really just a blank check company, the market will not be excited about Pivotal Investment Corporation II. Instead, the focus will be on XL Fleet, especially since it’s a billion-dollar startup specializing in the electrification of commercial trucks.
Electric trucks are all the rage this year, but not all EV SPACs are built equal. As a savvy investor, you need to focus on trust marks rather than hope and hype.
So, is XL Fleet an established brand with a strong value proposition to potential shareholders? If so, the stock PIC could be a bold addition to an electric vehicle portfolio.
PIC Stock at a glance
The first thing to know is that upon closing of the SPAC agreement between Pivotal Investment Corporation II and XL Fleet, the combined company will simply be called XL Fleet. In addition, this company will be listed on the New York Stock Exchange under the stock symbol XL.
So now, let’s take a closer look at the rollercoaster price action of the PIC stock. Prior to the reverse merger announcement, there was not much movement in this stock. Month after month, the stock price has remained close to $10.
That changed quickly when the deal with XL Fleet was revealed. So in mid-September, PIC stock jumped to its 52-week high of exactly $14.
Interestingly, the pop was followed by a decline in the stock price. On October 23, PIC stock closed at $10.33, almost marking a full round trip to $14 and back.
Does this reflect real problems with the company? Or is this another chance for investors to get in at a good price? That’s the billion dollar question, so let’s explore the electric truck start at the heart of this fascinating SPAC.
Known and Trusted
Other EV companies might be met with some skepticism because they aren’t yet trusted brands. In some cases, these companies didn’t even sell products or generate revenue.
Therefore, I can understand if there is some initial skepticism regarding the PIC stock. In the case of XL Fleet, however, it is an established and trusted brand among a number of high-profile customers.
Indeed, XL Fleet was well known as a provider of electrified powertrain solutions for commercial fleet vehicles in the United States and Canada prior to the announcement of SPAC. I’ll let the company spit out some stats for you now:
“XL has become a trusted brand for over 200 of the largest commercial and municipal fleets in North America, with over 3,200 XL systems deployed and over 130 million customer miles driven to date. »
No debt and expansion plans in sight
Some people might focus on SPAC’s $1 billion anticipated implied enterprise value, which would call it a unicorn. Yet there is another feature of this SPAC that is far more impressive.
Specifically, this business combination will have “no material debt that is expected to be outstanding.” That’s something you won’t find in all startups, especially newer companies in the electric vehicle space.
Additionally, not only is XL Fleet apparently debt-free so far, but the company may be in expansion mode. The company reports that XL Fleet’s electrification systems are already available on “a wide variety of Class 2-6 vehicles.”
However, XL Fleet is also preparing to supply its systems to Class 7 and Class 8 vehicles from 2022. Overall, it considers the total addressable market to exceed $1 trillion. Clearly, XL Fleet is seizing a blue sky opportunity with amazing growth potential.
This is no time for “SPAC fatigue”, as XL Fleet stands out for its brand of trust and ambitious expansion plans. So if you’re ready to try out a new and unique electric vehicle SPAC, consider buying some PIC stock.
As of the date of publication, neither Louis Navellier nor the member of the InvestorPlace research staff principally responsible for this article holds (directly or indirectly) any position in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a graduate student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis has discovered the “master key” to profiting from the greatest technological revolution of this generation (or any other).
More from Investor Place
The post Buy Pivotal Investment Stock for a Road Tested SPAC EV appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.