What happened
Shares of Switchback Energy Acquisition (SBE +0.00%) jumped 19.2% in December, according to data provided by S&P Global Market Intelligence, as investors continued to push stocks related to electric vehicles higher.
So what
As of now, Switchback Energy is still a special purpose acquisition company, or SPAC, with little more than cash on the balance sheet. But it has agreed to buy ChargePoint, the electric-vehicle charging network company, and ultimately that's what investors are betting on.
Image source: Getty Images.
While there wasn't any significant news out of Switchback or ChargePoint last month, the stock benefited from a market that's buying anything EV-related right now. There were some renewable energy subsidies extended as part of the stimulus package passed last month, but direct funding for EV charging wasn't the focus, so the market is speculating that a rising renewable energy tide will help ChargePoint's business long term.
Now what
It's hard to watch stocks rise like this and not think that there's a bubble forming. The ChargePoint deal isn't even closed, and yet the stock continues to shoot higher month after month on little more than speculation that the future of EV charging will be a massive business. I'm not buying into that speculation today, even if these companies are growth stocks for the next few years because the price is just too much to pay.
