The mood among investors has been relentlessly positive, and today’s news of the pharmaceutical industry’s continued progress in finding a potential cure for COVID-19 has done its part to help improve sentiment. Yet it was the electric vehicle market that once again caught the attention of the entire market. Tesla (NASDAQ: TSLA) reaches new heights, while the shares of a special purpose acquisition company Spartan energy acquisition (NYSE: SPAQ) soared on the news that he found a merger candidate in the electric vehicle industry.
Tesla’s latest moves
Tesla shares rose another 14% Monday morning. This drove its stock price above $ 1,750, which translated into market capitalization of more than $ 325 billion.
Fundamentally, investors seemed pleased that the automaker was taking steps to maximize the potential of its new vehicles. Tesla reduced the starting price of its new electric SUV model Y by $ 3,000, sending the total price of the sticker below $ 50,000. The move also came when Tesla apparently chose to end its standard line version of the Model Y, with CEO Elon Musk saying the range would be “unacceptably low” within 250 miles.
Tesla investors also have high hopes for the company to enter new markets. India represents the latest ambitious goal for the electric vehicle manufacturer, with more than a billion people and a consumer-friendly environment.
Still, much of the hype still surrounds the likely addition of Tesla stocks to the S&P 500, which could occur as early as next month. Tesla is announcing profits in a few weeks, and if the news is good, that would be the last hurdle before billions of dollars in index funds have to buy Tesla stocks – no matter what the price.
Fisker choisit Spartan Energy
Spartan Energy Acquisition experienced an even larger increase in its share price, up 16%. SPAC will reverse-engineer Fisker, a private electric vehicle, and with all the attention the electric vehicle industry is receiving, this was the perfect time to move forward.
Unlike some of its smaller rivals, Los Angeles-based Fisker already has a designed vehicle. The Fisker Ocean is a fully electric SUV, and industry enthusiasts have received the Ocean favorably, with several awards at trade shows earlier this year. With funding for the reverse fusion, Fisker hopes to start producing the Ocean by the end of 2022.
Investors should understand that some institutional investors will provide additional funding of $ 500 million for the business. Unlike those who buy Spartan Energy shares today, these institutions will only be able to get $ 10 per share. Such dilution is typical of PSPCs, however, and does not appear to interfere with the action of Spartan.
In recent times, PSPCs have been on fire, and the EV sector in particular has attracted the interest of private companies seeking to go public through reverse mergers. As long as Tesla leads the way, there will be investors who want to bet against the giant led by Musk in favor of small upstarts with potential lottery tickets.