Switchback Energy Acquisition Corporation

SBE Details

Leveraging Management Team’s Experience: Switchback Energy Acquisition Corporation (NYSE: SBE) is a shell company formed for the purpose of effecting a merger, capital stock exchange, stock purchase, asset acquisition, reorganization or related business arrangement with one or more companies. The company is searching for a target business in the energy industry in North America. SBE was incorporated on May 10, 2019 and since then, it has not commenced any operations. The company’s management team has extensive experience in both investing in and operating in the energy industry. Considered as an “emerging growth company” by SEC, the company has an advantage of certain exemptions from various reporting requirements. As at 17 September 2020, the company had a market capitalization of ~$559.52 million.

June 2020 Quarter Results: During the June 2020 quarter, the company spent $176.8k on general and administrative expenses and incurred a franchise tax expense of $50k. For the quarter, the company incurred a net loss of $124.17k. At the end of June quarter, the company had total cash of $42.46k and total assets of $317.72 million.

June Quarter Statements of Operations (Source: Company Reports)

Current Plan: The company continues to utilize the network and industry experience of its management team and NGP in seeking an initial business combination and employing its acquisition strategy.

Stock Recommendation: As per the various media reports, Switchback Energy Acquisition Corporation is in talks for a reverse merger with a ChargePoint, Inc., a leading network of electric vehicle (EV) charging stations in North America and Europe. This could be a reason why the stock zoomed up in the past couple of days. Over the last three months, the stock has provided a return of 50.28% and is trading near to its 52-week high of $14.35. Notably, the company has not confirmed anything with regard to this reverse merger. Considering the company’s limited operational history, absence of any concrete information from the company and current trading levels, we suggest investors to avoid the stock at the closing price of $14.25, up by 7.14% on 17 September 2020.

SBE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Tortoise Acquisition Corp.

SHLL Details

Backed by Strong Management Team and Sponsor: Tortoise Acquisition Corp (NYSE: SHLL) is a blank check company focused on identifying and completing its initial business combination with one or more businesses involved in the energy sector in North America. As at 17 September 2020, the company had a market capitalization of ~$1.39 billion. The company’s sponsor- Tortoise Sponsor LLC, a Delaware limited liability company has a long history of making investments in publicly traded and privately held companies operating in the energy sector. The company’s management team has extensive experience in the energy industry, ranging from acquiring and developing assets and companies.

June 2020 Quarter Results: During the June 2020 quarter, the company spent $2.27 million on general and administrative expenditure and incurred a net loss of $2.25 million. As at 30 June 2020, the company had total assets of $236.99 million, comprising $231k of cash and $236.64 million of Investment held in Trust Account.

June 2020 Quarter Results (Source: Company Reports)

Merger with Hyliion Inc: On 19 June 2020, the company announced a merger with Hyliion Inc., a leader in electrified powertrain solutions for Class 8 commercial vehicles, to create a combined entity called Hyliion Holdings Corp. which will trade on NYSE under the new ticker symbol “HYLN”. The combined company is expected to have a pro forma market capitalization of more than $1.5 billion. From an upsized $325 million PIPE, the company will receive ~$560 million. Proceeds from the merger deal will be utilized for operational expansion, product commercialization, and for general corporate purposes. Notably, the company is going to conduct a special meeting on 28 September 2020, to approve the pending business combination between TortoiseCorp and Hyliion Inc.

Hyliion Inc, recently launched its Hypertruck Electric Range Extender (ERX) that provides more than 1,000 miles of range. The launch of Hypertruck ERX is anchored by Agility, a leading logistics company. It is to be noted that, Agility has agreed to invest in a private offering of securities to be issued by SHLL in relation to the business combination with Hyliion Inc.

Other Recent Updates: Hyliion Inc and Dana Incoporated recently launched a national program with Idealease to demonstrate Hyliion’s Hybrid Diesel Powertrain to Idealease customers.

Stock Recommendation: Over the last three months, the stock of SHLL has increased by 368.88% and in the last one month it has increased by 80.15%. The stock is currently inclined towards its 52-weeks high price level of $58.66.  On the technical analysis front, the stock of SHLL is trading at a support level of ~$44.62 and a resistance level of ~$51.44. It is to be noted that the company’s search for a business combination may be impacted by the recent COVID-19 outbreak. Considering the company’s lack of business diversification, limited operating history, price movement over last few months, current trading levels and uncertainty surrounding COVID-19 impacts, we suggest investors to avoid the stock at the closing price of $47.92, up by 1.94% on 17 September 2020.

SHLL Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.