What's up guys and welcome back to the
channel. The EV market is really heating
up in the past few weeks and looks to
have a huge future and despite renewed
interest in this sector it seems like
the potential of the ggpi Polestar
merger is still flying under the radar
for many investors so today i want to
talk about some articles that i've come
across this weekend including a blog i
read discussing a potential gamma
squeeze which is very interesting if
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not financial advice and i encourage
everyone to do their own due diligence
now let's dive into it with the quick
overview of the company and then on to
the latest news. Polestar is a global
pureplay premium electric vehicle
company based in sweden with a mission
to produce progressive electric
performance cares designed and
engineered without compromise they say
that they are
design focused electric performance care
brand harnessing refined performance and
cutting edge technology determined to
improve the society we live in by
accelerating the change to fully
electric climate neutral future they are
trying to achieve net zero greenhouse
gas emissions while leading development
of new technologies
the company was originally founded in
1996 as a racing company and developed a
partnership with volvo before being
acquired by the volvo group in 2015.
they announced their (polestar stock analysis) won in
2017 and post their two in 2019.
in 2019 they opened their Polestar
production facility and by 2020 were
making their first sales
as of 2021 the company is operating in
select countries across europe and the
united states and canada but are
planning major expansion over the next
two years across europe asia and the
middle east
i have just come across this article
this was written earlier this week ggpi
stock could rise more after the Polestar
merger date in 2022
over the last year several startup ev
companies have gone public through a
spac reverse merger the startup ev
companies include success stories like
lucid motor which was arguably the most
hyped merger of 2021
which is true
at one point it felt like every just to
talk about lucid
perhaps due to some countries still
being in lockdowns at the beginning of
this year but the massive hype around
this caused lucid to gain over 500
percent in just a few weeks
on the other end of the spectrum we have
lordstown motors
which has fallen over 50 percent from
its back ipo price and it's now a penny
stock
now this is a very similar story
but a very different outcome
large town motors gained over 300
percent but has since lost about 90
percent of its value
lordstown motors was another stock that
i felt anyone with a camera was talking
about
but there was other examples too such as
nikola and Hylionholdings the list
really does go on
now ggpi will merge with polestar in the
first half of 2022. ggpi hasn't
announced a definitive merger days yet
but the two companies expect to complete
the business combination in the first
half of 2022
after the merger the combined entity
will be renamed Polestar automative
holdings uk and the ticker will change
to psny
while SPACs did spend most of 2021 being
beat down heavily that has changed over
the past two months we have seen lucid
which had dropped below 20
gain over two hundred percent and reach
back to its high from earlier this year
but we have also had a stellar response
to rivian's recent ipo
while rivien stock opened at about
eighty dollars it ran to nearly 180 in
just a few days
which reminded me of the insane hype
that we seen at the beginning of the
year surrounding lucid this has now
dropped back a bit but is still far
above its ipo price and well above 100
dollars too
in most cases spac stocks see an upside
after the merger is approved
also once the merger is completed and
the merged entity starts trading we
usually see momentum
it isn't certain that ggpi will go up
after the merger completion and a lot
will depend on the ev market sentiments
i feel that the way the market is right
now with positive sentiment towards ev
companies
then if ggpi was to complete its merger
soon then this would skyrocket but i
still think that unless there is a
seismic change in the market pulse star
looks set to make big gains anyways
the upside in Polestar stock will depend
on execution
looking at the ev markets investors have
been willing to pay a premium for
quality ev companies that are executing
well
lucid stock surged when it started
deliveries
similarly rivien has also started
deliveries of its vehicles even tesla
once production and sales started to
really take off
only about two years ago it is then that
the share price began to rock it up
gaining roughly
2 500 percent since october 2019.
looking at other startup ev companies
lordstown stock has tumbled after the
company faulted on execution and delayed
the delivery timeline to the third
quarter of 2022
which was a year behind schedule
in contrast canoe brought forward the
delivery timeline to the fourth quarter
of 2022 which led to a spike in the
stock
this is where Polestar stands out
compared to other startup ev companies
pulstar has already had two models under
production and expects to launch more
models by 2025. the company expects its
deliveries to rise 29 fold between 2020
and 2025 and reach 290 000 units
similarly its revenues are expected to
rise to 17.8 billion in 2025.
now let's not forget that unlike a lot
of startup ev companies pools that are
basing their projections based upon the
production and sales capacity of the
company that is already producing and
selling cares
the demand is already there it is just a
question of scaling up production to
meet that demand
most ev startups have never sold any
cares
that base their projections around their
concept and what is ultimately an
opinion of what is possible post there
are light years ahead of that right now
it is literally just about getting the
production capacity scaled up to meet
demand that is already there
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channel like this (polestar stock news) looks
undervalued compared to lucid and rivian
based on current ggpi stock price we get
a pro forma market cap of around 28
billion dollars which is far below what
rivien and lucid motors are currently
commanding
looking at the comparatively low
valuations pulsedair looks like a good
ev stock to buy ahead of the merger
the backing from volvo would add value
to Polestar while a lot of vv companies
including tesla have struggled with
production at times support from a
seasoned automotive producer would help
polstar's execution risk
successful production and deliveries
could take the stock much higher than
current levels
and let's not forget the Polestar is not
just backed by volvo but also
gili automotive
the gili group sold over 2.4 million
cares in 2020 so production nearly
certainly won't be a problem Polestar is
also backed by hollywood actor leonardo
dicaprio the actor is a long-time
environmental activist with a focus on
climate change
but Polestar also have other plays
not just purely the car manufacturing
side of the business Polestar could be
looking to supply powertrains to other
automakers polstar could become a
provider of premium evs as well as
powerful and sophisticated powertrains
as well as developing a 603 horsepower
electric motor they are working on an
800 volt bi-dilectoral battery pack
in the next three years they will launch
three new vehicles including the p3
now this article is from october so it
is slightly dated
the idea behind sharing powertrains is
simple
it will help holster recoup some of its
r d investment dollars this new p10
electric motor is said to develop
603 horsepower and is fed by an 800
volt battery pack
on the future
p3 when combined with the front motor
the total system output could be as much
as eight hundred and seventy two
horsepower
according to polstar ceo
at top of the line powertrain is simply
part of our performance brand there
isn't any electric motor
with that power density on the market
just for matt put
for mass-produced cars
the p10 will not initially be offered
with the p3 but this is a highlight that
we will save for a little later now
something that i love to see in any
company that i invest in is a high level
of institutional investors whether that
is the likes of blackrock or airconvest
or even warren buffett
this can be important depending on each
company but in general these guys are
the professionals when it comes to
investing and their opinions should
definitely be noted
right now ggpi has total institutional
ownership of 72.98
valuing it over 791 million dollars a
total of 118 institutions own gdpi with
recent activity seeing a net increase of
around
23 million shares
i just came across this blog this
morning ggpi gamma-squeezed potential
increases as meme stock status rises
they say never to trust an anonymous
blogger on the internet and this is from
an anonymous blogger
who has their reasons for remaining
anonymous
and says that those reasons don't matter
all they're asking is to debate the
content
not who they are or their motivations
now just to be clear
i did not write this but i did find this
interesting and the author gives express
permission here for the work to be
shared so i thought i would show it to
you guys
i will also put a link in the
description for anyone who wants to take
a full read of this
but to be clear i do not recommend
that anyone would ever blindly invest
upon the opinions
of any blogger or youtuber it's
extremely important that everybody does
the due diligence and a lot of research
before investing in anything
so with that in mind
we already know the bullet case so we've
got a price target of 35 dollars
expectation to deliver 29 000 units
this compares very well with rivals and
the market cap sits at a fraction of the
likes of rivian and lucid the reasons
for being long are quite apparent but
the focus here is going to be on the
gamma squeeze potential of ggpi to
increase demand of call options
especially as the merger date nears
then there are screenshots here of call
options for december and january on
yahoo finance volume has been robust
over the past several days and open
interest has increased for calls despite
the stock price remaining steady the otm
calls have dropped in price as the
implied volatility has decreased this is
an ideal time
to buy calls as they are now cheaper
while the fundamentals driving a
potential squeeze improves then there is
listed here the numbers of the call
options at 10
12.15 17.50 and what this represents i
don't want to waste time reading this
as i've put the link in the description
so check this out if this is of interest
to you
in conclusion once the merger takes
place pulsar will have over 2 billion
shares outstanding
this is a consideration
for long-term valuation but for the
near-term squeeze potential all we care
about is the current number of ggpi
shares outstanding out of 80 million
shares already 16.5 million of them are
allocated for delta neutral in the money
call option hedges for all expiries
between december and ggpi is a bit a
factor of having a very big story packed
into a relatively small flows into a
spec
however ggpi is receiving a
disproportionate amount of interest in
call options right now because of this
story
in a normal ipo world Polestar would
have nearly 2 billion shares outstanding
and the call option interest that's
generating tens of millions of shares
potentially locked in hedges strategies
would not be a major factor to create a
gamma squeeze however on a float of 80
million this is a major factor
so what do you think of this
check out the actual blog post and leave
a comment and let me know what you think
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