Why Atlas Crest Investment Stock gained 15.1% in February


What happened

Actions of Atlas Crest Investment (NYSE: ACIC) jumped 15.1% in February, according to data from S&P Global Market Intelligence. The Special Purpose Acquisition Company (SPAC) has skyrocketed following news of the company’s merger with electric aircraft company Archer.

ACIC given by YCharts.

Atlas issued a press release on February 10 announcing merger plans. The amalgamated company will begin trading under the Archer name and trading under the ticker symbol ACHR upon completion of the merger. At the time of the merger announcement, Atlas said the adjusted net worth of the combined companies would be around $ 3.8 billion.

Two people next to an Archer electric plane.

Two people next to an Archer electric plane. Image source: Archer.

So what

SPACs have grown in popularity over the past year as a way for small, growth-oriented companies to go public, but many stocks in the category have also seen massive sell-off after initial gains as a result. of a merger announcement. Atlas stock saw a pullback in conjunction with the sell-off of growth-dependent tech stocks that rocked the wider market in late February, but the company was still able to end the month with solid double-digit gains.

Archer aims to deliver the world’s first all-electric commercial light aircraft, and the company’s current model is capable of traveling up to 60 miles at 150 miles per hour on a single charge. Electric planes are an interesting growth market, but investors should understand that Atlas stock is prone to volatility and its stock price has tended to decline amid the continued selling of growth stocks.

Now what

Atlas Crest stock has lost ground in March trading so far, slipping around 17.5%.

ACIC table

ACIC given by YCharts.

The merger between Atlas and Archer is expected to be finalized in the second quarter of 2021. Archer is positioned as one of the first leaders in the niche of electric urban air mobility, and the company has also received investments from United Airlines and Stellantis. But it’s still unclear what the demand will be for its specialty vehicles, or what the space might look like if competitors devote more resources to it.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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