What happened

Lagging after the holiday weekend, both the S&P 500 and the Dow Jones Industrial Average are down today. Shares of Sustainable Opportunities Acquisition (SOAC), however, are soaring. As of 1:01 p.m., the stock is up 8.5%, retreating slightly from its climb of 14.5% earlier in the trading session.

Investors are celebrating news today that Sustainable Opportunities Acquisition, a special-purpose acquisition company (SPAC), is a major step closer to completing its merger with DeepGreen Metals, a business focusing on producing metals for use in electric vehicle batteries.

A family member charging an electric vehicle while a child and another adult watch.

Image source: Getty Images.

So what

The catalyst behind the stock's rise today is news that Sustainable Opportunities Acquisition's shareholders officially approved the merger with DeepGreen Metals during a meeting on Sept. 3. The date of the closing of the merger wasn't announced, but when it occurs, the new business entity will be called The Metals Company. Upon the closing of the merger, The Metals Company will receive about $137 million in cash.

Unlike more traditional mining companies like MP Materials (MP -1.94%), which is mining metals from dry land for use in electric vehicle batteries, The Metals Company is committed to identifying mineral-rich resources on the seafloor. In addition to nickel, The Metals Company plans on producing manganese, copper, and cobalt from rocks found under the sea without generating any processing waste. According to The Metals Company, it will be the second lowest-cost nickel producer among global mining companies.

Now what

While the news that The Metals Company is on track to complete its merger, potential investors should recognize that there are a lot of additional hurdles for the company to overcome before it starts generating "green" from producing nickel and copper. In fact, the company doesn't forecast generating revenue until 2024. Therefore, only investors with significant risk tolerance should consider picking up shares.