What happened
Shares of CIIG Merger (CIIC) jumped more than 13% this morning before settling at 9% higher as of 11:30 a.m. EST.
CIIG Merger is a special-purpose acquisition company (SPAC) that is combining with electric van and bus start-up Arrival to form a public company valued at $5.4 billion.
So what
After shares in CIIG more than doubled in November, a general reversal in electric-vehicle (EV) names moved the stock down more than 20% in the last week. Today, some investors are taking advantage of that to get in before the company's merger is completed in early 2021.
Arrival bus scheduled to be produced starting in Q4 2021. Image source: Arrival.
U.K.-based Arrival is seeking to fill an EV niche supplying urban and delivery transportation needs.
Now what
Arrival says it already has $1.2 billion in orders, mainly for delivery vehicles for United Parcel Service (UPS 2.04%). UPS, investment firm Blackrock (BLK 0.99%), Kia Motors, and Hyundai Motor have collectively invested $300 million in the company.
The company touts its "microfactories," which it says give it more flexibility and require less invested capital than traditional manufacturing facilities. It says it can have these facilities operational within six months and can use existing commercial spaces and warehouses to bring production close to individual cities and customers.
Investors may be excited about its prospects, but there will be plenty of competition in this area. Today some investors are using the recent dip in price to add CIIG to the speculative portion of their portfolios.
