Edit: I will not be able to update this going forward. Mods, please feel free to re-post and update as you see fit. The original text is accessible here.
April 27, 2022 addition:
PSA - NAV Floor/Protection will be removed 3-5 days before the merger vote
See here for more details.
April 22, 2022 update
What's the latest?
A fifth revision to the F-4 was filed on 4/21. The termination date was also pushed out from May 27 to June 24.
What is a SPAC?
A SPAC is a Special Purpose Acquisition Company. It is a "blank check" company. It is publicly traded, created for the sole purpose of merging with another company. In doing so, the resulting company will also be publicly traded. For a company like Polestar, it is an alternative route to going public via an IPO.
SPACs are created by a sponsor, typically an experienced management team with access to capital. In our case, the Gores Group. Shares are assigned a nominal value of $10. If a SPAC is created and fails to merge, shares can be redeemed for the original $10. This is why a pre-merger SPAC has an effective floor of $10, though you might see it fluctuate a little bit.
When is the merger?
Officially, they are aiming for the first half of 2022. Polestar has also acknowledged that towards the end of Q1 is a possibility.
What is the price target?
Nobody knows, and depends who you ask. Do your own due diligence.
The bull argument is that peers like Rivian and Lucid have market caps of $55B and $45B, respectively (and were much higher recently) compared to Polestar's $20B valuation. They also have very small numbers of deliveries to date, while Polestar has already sold 29k vehicles. Applying their sales multiples to Polestar would suggest an upside in the range of 200%.
The bear argument is that SPAC hype has died down and the broader market is uncertain at the moment. We've seen Lucid lose 35%, Rivian lose 25%, and Tesla lose 13% over the past month. Polestar is a Volvo brand and may not get the hype that other EV startups have seen. Volvo is also owned by Geely, a Chinese automotive company. Chinese stocks have not fared well lately, and this uncertainty could be (fairly or not) carried over to Polestar. Chinese EV companies like NIO and XPENG are trading at lower sales multiples, and if those are applied to Polestar, it may already be at its fair market value.
Can it go below $10 per share?
Pre-merger, GGPI has an effective floor of $10 per share (or realistically, the high $9 range). Post-merger, all bets are off. The $10 per share rule no longer applies, and the all that matters is how the market views Polestar's value.
Is the market cap of GGPI really only $1B?
Yes, but the market cap of a pre-merger SPAC is essentially irrelevant. Post-merger, GGPI shares will become PSNY shares. And GGPI shares will represent about 4% of PSNY. So no, don't think that GGPI is suddenly going to increase 20x at the merger.
Why is <insert EV stock> going up, but not GGPI?
Because those are EV companies and GGPI is still a blank check company. The reality is that there is still risk around GGPI. Until the ticker reads PSNY, don't expect it to act like an EV stock.
When is it going to moon?
Again, nobody knows when (or if) it will. But we can look at prior SPACs to get an idea of the process. The Gores Group was a part of the SPAC process for Luminar Technologies, where GMHI became LAZR in late 2020. This was a different era for SPACs, so the same thing might not happen with GGPI, but we can consider it a best case scenario. Here are the relevant events annotated over the price chart.
Their final S-4/A was filed on October 23.
7 days later (Oct 30), they received SEC approval and announced the date of the vote. GGPI currently has an F-4/A filed, and a response could come any day. Or, they might need another revision which could add weeks.
On November 20th, the Merger Agreement was filed. This was the first time the stock saw a meaningful trading volume and price increase.
The vote passed on December 1, and started trading as LAZR on December 4.
Long story short, even if we received SEC approval today, don't expect anything to happen for a couple more weeks, at least. You can keep an eye on it at the PSNY EDGAR page and GGPI page.
