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Why Star Peak Energy Transition Stock Just Popped 10%

By Rich Smith - Updated Jan 19, 2021 at 11:25AM

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The IPO date approaches.

What happened

The stars are aligning again for investors in special purpose acquisition company -- and soon to be smart energy storage IPO -- Star Peak Energy Transition (STPK) this morning. As of 11:20 a.m. EST, shares of the clean energy SPAC are up a strong 10.7% on no apparent news whatsoever.

So what

It's been nearly two months since Star Peak, a shell company whose only purpose in life is to find a private company, buy it, and bring it public in a reverse merger IPO, announced it has found a target to bring public.

Star Peak will buy "Stem," which uses artificial intelligence to manage the energy storage and release of integrated battery storage systems for its customers, effectively bringing Stem public and changing its own ticker symbol to "STEM." The result: a new publicly traded renewable energy company with a $1.35 billion market capitalization, armed with at least $525 million in cash available to grow the business.  

Stock up glowing green arrow climbs on a stock screen

Image source: Getty Images.

Now what

Star Peak plans to close its acquisition and bring Stem public in the first quarter of 2021 -- a quarter that is now nearly one-third over. So while no official date for the closing has been set, we're getting closer to it by the day.

Once that day comes, Stem can turn its focus from completing the merger to capitalizing upon what Star Peak says is a "$1.2 trillion opportunity" to sell services that "optimize energy usage by automatically switching between battery power, onsite generation and grid power." And investors will finally get a closer look at Stem's financials and be able to determine whether Stem stock that has more than tripled over the last couple of months is still cheap enough to be worth buying.

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