As of this writing, GGPI stock is trading at a market price of about $10 per share, with a market cap of $21 billion. Its upcoming merger with Polestar should close in the first half of 2022. However, the company is not without its risks. These include ongoing Covid-related manufacturing headwinds and potential future hazards.
After reaching a record high in early May, GGPI stock‘s market share price has dropped 10.4% this week and is now trading just under $10 apiece. However, the company’s future looks bright with the announcement of its upcoming merger with Polestar. However, before investing in the company, you should be aware of some risk factors.
GGPI stock is currently trading at a discount relative to its EV peers. In fact, its current market share price is well below its pro-forma post-merger enterprise valuation of $20 billion. This reflects a significant discount to peers like Lucid (LCID) and Rivian (RIVN), which are trading at high sales multiples.
Shareholder approval of the deal is required before Polestar can go public. The company plans to raise approximately $1 billion through this transaction. After the IPO, the company plans to have a market cap of $21 billion. This includes $800 million of “SPAC cash” held in trust and an additional $250 million of PIPE investors. Additionally, the company expects to add $1 billion of cash to its balance sheet following the GGPI-Polestar transaction.
GGPI stock’s market cap is about $21 billion
GGPI stock has recently announced a business combination with the Swedish premium EV maker Polestar. The transaction is the latest example of EV pureplays trying to take advantage of the availability of public market funding. The deal is valued at about $21 billion.
GGPI stock’s price has been bouncing back and forth in recent days following last week’s Fed rate hike, which increased the risks of a recession. The decline came despite the company’s confirmation of an upcoming special meeting to vote on its merger with Polestar. However, a “post-Fed rally” has helped GGPI stock regain some of its former value. In fact, the company’s shares are trading at $10 and higher once again.
While the GGPI-Polestar merger is unlikely to produce a blockbuster valuation, it presents an attractive opportunity at current levels. The post-close valuation of the combined companies is expected to be close to their implied transaction enterprise value (EV), while retaining a modest premium over the implied transaction enterprise value (PV). Further, the EV/FY’23 sales ratio is discounted relative to EV peers with comparable growth profiles.
GGPI-Polestar merger is expected to be completed in the first half of 2022
Last September, GGPI SPAC and premium EV maker Polestar announced their intention to merge. As a result, the merger process is expected to close in the first half of 2022, with the goal of listing on the Nasdaq. Upon completion of the merger, Polestar is expected to have a market cap of around $21 billion. The deal will create a three-way relationship between the three companies, with each holding a significant stake in the other.
The company has ambitious growth plans and has a lot of exciting projects in the works. For example, it announced a deal with Hertz to buy 65,000 of its vehicles by the end of 2022. The deal is expected to generate $3.2 billion in revenue over the next five years. In addition to this deal with Hertz, Polestar recently announced a partnership with Enterprise.
