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Why CIIG Merger Shares Jumped Today

By Howard Smith - Dec 3, 2020 at 11:43AM

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Some investors are jumping in after a dip in the share price this week.

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.

Side view of Arrival bus.

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 -0.33% ). UPS, investment firm Blackrock ( BLK 0.32% ), 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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

CIIG Merger Corp. Stock Quote
CIIG Merger Corp.
CIIC
BlackRock, Inc. Stock Quote
BlackRock, Inc.
BLK
$923.86 (0.32%) $2.94
United Parcel Service, Inc. Stock Quote
United Parcel Service, Inc.
UPS
$204.72 (-0.33%) $0.67

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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