What happened

Shares of DiamondPeak Holdings (DPHC) soared by 53.5% in September, according to data provided by S&P Global Market Intelligence.

The special purpose acquisition corporation (SPAC) is slated to take electric truckmaker Lordstown Motors public before the end of the year. Extreme interest in it and other electric vehicle companies sent DiamondPeak's shares on a roller-coaster ride throughout the month. 

A rocket blasts off above the clouds.

Image source: Getty Images.

So what

A number of electric vehicle companies have recently been choosing to forgo the traditional IPO process and instead go public through reverse mergers with SPACs like DiamondPeak -- among them, Nikola (NKLA -2.22%), which, like Lordstown Motors, plans to manufacture an electric pickup truck, the Badger. Lordstown announced in early August that it had entered into a definitive agreement to go public through a merger with DiamondPeak. Shares promptly took off, rising 63.9% that month alone. 

That buying frenzy continued in September, particularly after rival Nikola was accused of fraud in a short-seller's report that dropped on Sept. 10. Investors clearly thought Nikola's loss was Lordstown's gain, and bid up DiamondPeak's shares even as they exited Nikola's. 

By Sept. 21, Lordstown's shares were up by more than 80% for the month, but a negative review of the stock by Jim Cramer on his Mad Money show triggered a sell-off -- DiamondPeak gave up more than half its September gains in just a few days. However, at the end of the month, two other electric vehicle-related SPACs -- Graf Industrial and Tortoise Acquisition -- held successful merger votes, which boosted stocks across the segment, allowing DiamondPeak to finish the month strongly. 

Now what

The ink still isn't dry on DiamondPeak's merger agreement with Lordstown, but it seems likely to proceed as planned. However, even after the deal is done, Lordstown will remain a speculative investment: It has a manufacturing facility, plans, and tens of thousands of preorders for its electric pickup, the Lordstown Endurance ... but that's about it. A lot could go wrong before the first Endurance rolls off the production line (an event that is expected to occur in late 2021).

It was a bumpy ride for Lordstown last month, and investors should expect similar ups and downs over the next year as the stock reacts both to news from other electric carmakers and whatever news comes from Lordstown itself.