What happened
Shares of electric-pickup start-up Lordstown Motors (NASDAQ: RIDE) opened higher in the company's first post-merger trading session on Monday morning. Lordstown completed its merger with DiamondPeak Holdings (DPHC), a special-purpose acquisition company, late on Friday.
As of 10 a.m. EDT, shares of the newly combined company were up about 10.9% from DiamondPeak's closing price on Friday.
So what
Lordstown said on Friday that its merger with DiamondPeak had closed as planned. The deal, which included a so-called "PIPE" (for "private investment in public equity") for investors including General Motors (GM 4.37%), left the merged company with about $675 million in net proceeds.
Lordstown's electric pickup, called the Endurance, is designed to meet the needs of commercial-fleet operators. Image source: Lordstown Motors.
In a statement, CEO Steve Burns said that sum should be enough to get the company's electric Endurance pickup into production. Lordstown owns a former General Motors assembly plant; GM has provided advice and assistance as Lordstown works to finalize the Endurance's design and prepare the factory to produce the truck.
Now what
Auto investors have sharply bid up the stocks of several electric-vehicle start-ups this year, following Tesla's huge run-up in value in late 2019 and early 2020. While Lordstown has yet to ship a product -- it expects to have the Endurance in production by the end of 2021 -- the company's connections to GM and to electric-van maker Workhorse Group have given it some added credibility with investors.
Now, though, it has to execute. Stay tuned.
