Should you buy CLII SPAC shares before the EVgo merger?

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EVgo goes public through a blank check firm called Climate Change Crisis Real Impact I Acquisition Corp (CLII). EVgo offers a charging service for electric vehicles. It will expand options for investors looking for EV fees after Chargepoint (CHPT) goes public. Is It Good To Buy CLII SPAC Stock Before The EVgo Merger Date?

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With currently around USD 15.50 per share, the CLII SPAC share has risen by more than 50 percent compared to the quoted price. Since the EVgo merger deal was announced, the company has grown by 16 percent. The stock has traded between a low of $ 9.75 and a high of $ 24.34 since its debut.

Source: EVgo Facebook

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Now the CLII SPAC share is trading around 36 percent below its most recent high. This appears to be the result of a major correction in green energy stocks and EV stocks after the recent surge.

CLII stock has risen since the Evgo deal

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CLII-EVgo merger date

CLII SPAC and EVgo announced their merger agreement on January 22nd. They intend to close the transaction by the end of June 2021. The blank check company raised $ 230 million when it went public in September 2020. An additional $ 400 million was raised through PIPE deals involving institutional investors such as BlackRock, Pimco and Wellington Management. EVgo is expected to receive $ 575 million in net cash to expand its charging system and serve more customers.

The CLII SPAC stock symbol will change to “EVGO” upon completion of the merger. Investors who hold shares in the blank check company will own approximately 9 percent of the combined company. PIPE investors will own 17 percent and existing EVgo investors will own 74 percent.

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EVgo versus Chargepoint

Chargepoint is Evgo’s main competitor. The others are Blink Charging (BLNK) and Beam Global (BEEM). Chargepoint also went public through a SPAC deal. Post-merger stock started trading on March 1 and fell more than 7 percent on the first day of trading.

While the EVgo SPAC deal valued the merged company at $ 2.6 billion, the Chargepoint SPAC deal valued the merged company at $ 2.4 billion. While EVgo received $ 575 million in cash, Chargepoint received $ 683 million in cash. EVgo intends to use its money to invest in expanding its charging infrastructure. In the meantime, Chargepoint will use its cash to pay off debt in addition to funding growth.

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EVgo has installed more than 800 chargers in 34 states. The charging point has more than 115,000 charging stations. EVgo currently serves more than 220,000 customers. Chargepoint has more than 4,000 corporate customers. Both companies plan to expand their charging system to better take advantage of growing market opportunities as more and more drivers use electric cars.

Outlook for EV charge levels

As more electric cars hit the market and drivers look for convenient ways to top up on the go, the demand for public EV charges will continue to grow. Easy access to fast charging will be central to the wider adoption of electric cars. The Biden government plans to build 550,000 electric vehicle charging stations and convert the government fleet to electric models.

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evgo share purchaseSource: EVgo Facebook

It’s a good sign for EV charging companies like EVgo as the government is using its support in efforts to encourage drivers to transition from gas-powered cars to environmentally friendly electric models.

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EVgo appears well positioned to capitalize on the booming demand for electric vehicle chargers. The company already operates charging stations in 34 states and is aiming to set up a nationwide charging system. EVgo will use the money from the CLII SPAC deal to finance the expansion of its charging infrastructure.

CLII SPAC looks like a good buy

EVgo chargers are suitable for electric cars from all manufacturers. Since Tesla charging stations only serve Tesla drivers, the public charging provider EVgo has a huge market to offer. EVgo chargers are strategically located on city streets, in parking lots and outside of office buildings.

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In 2020, EVgo partnered with General Motors to help the traditional automaker build close to 3,000 charging stations as more electric cars are expected to be sold in the coming years. EVgo has partnered with Uber and Lyft to charge electric cars in their ride-sharing fleet.

With Chargepoint and Blink Charging stocks trading above $ 30 and $ 40, respectively, the CLII SPAC stock could appeal to investors looking for cheap EV stocks at around $ 15.

After all, prior to the merger, SPAC shares generally did well for investors. For example, CCIV stock rose as much as 500 percent and delivered tremendous returns for early investors prior to the Lucid Motors merger announcement. The CLII SPAC share could be a good addition to your portfolio before the EVgo merger.

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