DiamondPeak Holdings Corp (NASDAQ: DPHC) is one of the hottest Special Purpose Acquisition Companies (SPAC) listed on the market right now. The company initially announced its reverse merger with Lordstown Motors on the 3rd of August. DPHC has since climbed an impressive 125%, rewarding investors who had snapped up the chance to buy early. The hype surrounding the sheer potential Lordstown Motors can bring to the EV industry is exponential. This article will breakdown the key information you need to know as we edge closer to the DiamondPeak Lordstown merger.

Key points

  • Shareholder meeting scheduled for the 22nd of October, where shareholders will vote on the SPAC’s decision to merge with the EV innovator, Lordstown Motors.
  • If successful, the vote is one of the final steps to complete the merger
  • Once the merger is completed, Lordstown Motors Corp. will trade publicly on the NASDAQ under the new ticker symbol “NASDAQ:RIDE.”
  • SHLL and Hyliions merger success is driving immense investor confidence in other listed SPAC’s. Especially SPAC’s who are focusing on merging with new generation  EV innovators.
  • Approx. $675 million gross capital raised from the transaction will be used to fund Lordstown’s production of the Endurance. Endurance model manufacturing is expected to begin mid-2021.
  • Trump excited about the Lordstown pick-up truck technology and the jobs Lordstown will provide in Ohio as they expand their operations.

Trump discusses the Lordstown EV Endurance truck, White House 

When will the DiamondPeak Lordstown merger be completed?

As per the SEC filings the merger is to be completed in the 4th quarter of this year, however we now have a better estimate for timing. The shareholder vote is to be held on the 22nd of October. This suggests the DiamondPeak Lordstown merger should be completed before the beginning of November. Interestingly, the special meeting where shareholders will vote on the outcome is essentially the last step before beginning the merging process. This Harvard Law article has some quality information on the SPAC process.

“The SPAC will undertake a mandatory shareholder vote or tender offer process, in either case offering the public investors the right to return their public shares to the SPAC in exchange for an amount of cash roughly equal to the IPO price paid. If the business combination is approved by the shareholders (if required) and the financing and other conditions specified in the acquisition agreement are satisfied, the business combination will be consummated (referred to as the “De-SPAC transaction”), and the SPAC and the target business will combine into a publicly traded operating company.”

Harvard Law article “Special Purpose Acquisition Companies: An Introduction”

Assuming all conditions are met with the majority of voting shareholders, the company is likely to merge within days following a shareholder approval. For example, SHLL and Hyliion had merged within one week of their special meeting (merger vote). This was a rapid turnover considering one of their proposals had not been agreed upon in the initial vote.

What investors need to know about the DiamondPeak Lordstown merger?

Firstly, Special Purpose Acquisition Companies (SPAC) main objective is to find private companies who are looking for funding. However, these private companies don’t want the hassle of organising an IPO independently. We have seen SPAC’s popularity soar this year as EV manufacturers have found the “backdoor to Wallstreet”. EV companies such as Nikola and Hyliion have gained incredible exposure and funding via the corporate shell SPAC’s provide.

Endurance model set for production in 2021

Secondly, Lordstown Motors as a company will receive a huge influx of funding to jump-start the large scale production of the Endurance pick up truck. Lordstown will be the first publicly listed company who is solely focused on the development of EV pick-up trucks. The endurance 2021 model has the worlds first in-wheel motor which will improve productivity and efficiency of the vehicle. This gives Lordstown an advantage over its fierce competition of combustable engines.

“Our all- electric full-size pickup truck delivers the equivalent of 75 miles per gallon and has been systematically engineered and competitively priced specifically for the large commercial fleet market, which includes companies in manufacturing, contracting, utilities, transportation and delivery, and agriculture, among others. Since its unveiling just over a month ago, the Endurance has been met with enthusiastic support, and to date, we have secured $1.4 billion of pre-orders.”

Steve Burns, Founder and Chief Executive Officer of Lordstown

Post Merger pricing for Lordstown (NASDAQ:RIDE)

Lastly, the post merger should allow for a nice entry point as investors begin to sell-off their shares under the new ticker (opinion not advice). From what we have seen after the completion of the Hyliion + SHLL merger, HYLN has since lost half its value. However, this has allowed for investors interested in the long term projections of the company to enter at a better price.

Summary on the DiamondPeak Lordstown merger

In conclusion, the DPHC Lordstown merger will allow for the EV manufacturer to fund the upscale in production of the evolutionary Endurance 2021 series. It is important to follow the stocks price closely after the merger. Speculators may look to sell off their positions. This is where the longs will get the most competitive prices respectively (opinion not advice).

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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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