Here is the last SPAC EV to go public; L Brands returns to the top
The stock market eased after a wild start to November, and the period of calm continued Thursday morning. Enthusiasm for the holiday season was tempered by nervousness over coronavirus-inspired restrictions, and market participants turned to stocks they were most comfortable with in times of uncertainty. At 11:30 a.m. EST today, Dow Jones Industrial Average (DJINDICES: ^ DJI) was down 86 points to 29,352, and the S&P 500 (SNPINDEX: ^ GSPC) had lost 2 points to 3565. But the Nasdaq Composite (NASDAQINDEX: ^ IXIC) climbed 67 points to 11,869.
In the market, the electric vehicle (EV) industry has received enormous attention. This continued today as momentum developed around another Special Purpose Acquisition Company (SPAC) that targets a private player in the electric vehicle niche. Meanwhile, the lingerie and personal care giant L Brands (NYSE: BBWI) got a big boost after releasing its latest financial results.
An EV target over the pond
The latest news in electric vehicles came from a PSPC called CIIC merger (NASDAQ: CIIC). The stock price rose another 29% on Thursday morning, adding to its 24% rise on Wednesday.
The entity was just made public in February, but it announced its planned target early on Wednesday. The name of the company is Arrival, and the UK-based designer and assembler of electric vehicles seeks to reinvent the automotive industry.
Specifically, Arriving’s approach is to use micro factories rather than massive production facilities. In doing so, Arrival is trying to make production less capital intensive, which in turn should lower costs for consumers and make it easier for the industry to move away from fossil fuel vehicles.
Under the terms of the agreement, CIIC will provide $ 660 million in capital to help Arrival’s expansion plans. That values the company at around $ 5.4 billion.
The news helped push shares of other electric vehicle players up, including a 4% gain for Nicolas (NASDAQ: NKLA) and a 3% increase in the shares of Lordstown Engines (NASDAQ: RIDE). With contracts worth $ 1.2 billion and production slated for the final quarter of 2021, Arrival could be an interesting game on VE.
L Brands gets a W
Somewhere else, L Brands stock climbed 15%. The company posted extremely strong third quarter results, paving the way for a strong recovery for the lingerie and personal care retailer.
L Brands saw sales increase 14% from last year’s levels, boosted by a massive 28% increase in same-store sales for the period. The company posted better-than-expected earnings, reversing a loss from the previous year and rebounding well after difficult conditions earlier this year.
CEO Andrew Meslow attributed the gains to several factors. The continued strength of Bath & Body Works segment results continued to bear a large part of the load for L Brands. In addition, the company saw a significant improvement in the performance of the Victoria’s Secret chain of stores. Despite a cautious approach to the pandemic, L Brands is positioning itself for a successful holiday season.
The move pushed L Brands’ share price to its best level since early 2018. The company’s turnaround has been a long time coming, but shareholders are finally being rewarded for their patience. Under difficult conditions for many retailers, L Brands is executing its recovery strategy well and raising investor optimism for the first time in a long time.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.