Please ensure Javascript is enabled for purposes of website accessibility

Why Arrival Stock Jumped This Morning

By Howard Smith - Jun 16, 2021 at 10:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another speculative stock is catching the eyes of retail traders.

What happened

Shares of five-year-old electric vehicle start-up Arrival (ARVL 2.88%) were jumping Wednesday morning. After an initial 15% pop, Arrival shares pared some gains and were trading up 7.3% as of 9:40 a.m. EDT. 

So what

U.K.-based Arrival went public through a SPAC (special purpose acquisition company) merger in March 2021. Since then, it has been progressing in its strategy of building lower-cost microfactories to support customer orders for its electric delivery vans, buses, and cars to be used for ride-hailing services. The stock had about 7% of its public share float sold short as of May 28, according to MarketWatch data. And the retail trading crowd seems to have noticed the company after a Reddit user posted a detailed look at the stock on the WallStreetBets forum yesterday. 

White Arrival electric delivery van.

Image source: Arrival.

Now what

Arrival's strategy is to build its microfactories near customers or in metro areas that plan to buy its vehicles. The company says it can have these factories running within six months and could even use existing commercial spaces and warehouses where appropriate. This allows for lower initial invested capital than traditional manufacturing plants and creates higher flexibility to serve individual customer needs. 

Arrival has already announced that two microfactories will be built in the southeast U.S. near Charlotte, North Carolina. One facility will be focused on supplying United Parcel Service (UPS 0.98%) with delivery trucks. UPS, an early investor in Arrival, has ordered 10,000 of the company's electric vans. 

But the WallStreetBets followers don't generally pay attention to the business itself. For now, the stock seems to be jumping just because Reddit users are looking to push the stock up, potentially driving short-sellers to cover

Howard Smith owns shares of Arrival. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Arrival Limited Stock Quote
Arrival Limited
$1.43 (2.88%) $0.04
United Parcel Service, Inc. Stock Quote
United Parcel Service, Inc.
$204.89 (0.98%) $1.98

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.