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Gores Guggenheim: Polestar Merger Should Entice EV Bulls

Vince Martin profile picture
Vince Martin


  • SPAC Gores Guggenheim is merging with Sweden's Polestar in a deal valued at $20 billion.
  • Unlike other EV companies that have gone the SPAC route, Polestar has an established business — and the company has further advantages over rivals.
  • Valuation is a concern, and the upside here might not be quite as large as for other stocks in the sector.
  • Still, this is a solid and intriguing story, and the lack of enthusiasm toward GGPI stock seems like a surprise.

IAA 2021 Munich Auto Show

Jan Hetfleisch/Getty Images News

What a difference seven months makes. Electric vehicle manufacturer Polestar is merging with special purpose acquisition company Gores Guggenheim (GGPI) — and investors don't seem all that excited. GGPI stock gained just 4.7% on the news.

This article was written by

Vince Martin profile picture
Overlooked Alpha launched April 2022 - subscribe at overlookedalpha.com. Some OA articles are also available here at Seeking Alpha.I've been contributing to Seeking Alpha and other investment websites since 2011, with a general (though far from rigid) focus on value over growth. I got my Series 7 and 63 back in 1999, and watched the dot-com bubble peak and then burst in real time at a small, tech-focused retail brokerage in NYC.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

Really like sitting on the Jan 2021 10 dollar call options here at .45 cents. Seems like this could be a powder keg and everyone just waiting on a true move off 10 dollar NAV. May be starting tomorrow with today’s push.
@jfog125 just passed 1.18 on these options.
tizod profile picture
I don’t get the “market will grow”. My thought is as car get more expensive(EV especially) and more reliable(EV especially) that will offset additional drivers. Also the threat of autonomous business will reduce #cars/year required. I think there is a large number of manufacturers getting into a declining market. Nothing revolutionary here to change or grow market.
Vince Martin profile picture
@tizod I definitely agree on the autonomous side - if the future is just algo-powered AVs, demand absolutely plunges.
But I also think that’s way far off - as in decades. There are some salad days for the ICE to EV shift in between IMHO. Even if EVs last longer that shouldn’t really impact demand for quite some time.
Owen213 profile picture
not much to lose at $10.24, if it goes up great, if it dips you can redeem and wait for another shot after despac. Warrants are around $2. Valuation is high though and this one might end up being heavily shorted.
Vince Martin profile picture
@Owen213 yeah, that's a fair point, one I should have brought up here. But that requires some discipline - we've seen so many of these de-SPACs just fall off the table after close, so unless you're bullish I think the trade is either selling for $12/$14 whatever target you want or redeem. Holding these through the close seems to add risk, at least based on the performance of the group over the past six months.
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