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Last Post: 2/27/2021 3:59:49 PM - Followers: 51 - Board type: Free - Posts Today: 10




 

First Look: The SPAC Deal That Will Take Electric-Pickup Start-Up Lordstown Motors Public

DiamondPeak Holdings has agreed to merge with Lordstown. Here's what we know.

https://www.fool.com/investing/2020/08/03/first-look-the-spac-deal-that-will-take-electric-p.aspx?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
 

Electric-pickup start-up Lordstown Motors is going public: The Ohio-based company said today it has agreed to a merger with 
DiamondPeak Holdings (NASDAQ:DPHC), a special-purpose acquisition company (or SPAC), in a deal that will provide it with the funding needed to put its electric pickup truck into production.

Lordstown, which owns a former General Motors (NYSE:GM) factory and counts GM among its investors, is planning to have its Endurance pickup truck in production by the end of 2021.

Here's what we know about the deal. 

 
[-chart]g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/585469/lordstown-endurance-reveal-june-2020.jpg&w=2000&op=resize[/chart]
 

About the deal that will take Lordstown Motors public

If you followed the deal that took electric-semi start-up Nikola (NASDAQ:NKLA) public in early June, the basic outline of the Lordstown deal will look familiar. 

  • Lordstown will merge with DiamondPeak. 
    The merged company will be named "Lordstown Motors," and the former DiamondPeak stock will trade under the new symbol "RIDE." 
    The transaction includes a $500 million PIPE (for "private investment in public equity"), fully funded by investors including General Motors,
    Fidelity Investments, Wellington Management, and accounts managed by BlackRock.
    GM's $75 million investment includes "in-kind contributions" that have already been made.
    Lordstown will receive about $675 million in gross proceeds, enough to get the Endurance into production.
    The pro forma equity value of the combined company is about $1.6 billion. 

The transaction is expected to close by the end of the fourth quarter.

Who is Lordstown Motors?

Readers may recall that Lordstown Motors is the company that took possession of the former GM factory in Lordstown, Ohio. 

In its heyday, GM's Lordstown plant employed about 10,000 workers. But GM idled the factory in 2019 amid slumping demand for its product,
the compact Chevrolet Cruze sedan -- a decision that led to some strong expressions of concern from President Trump
and that was a factor in the United Auto Workers' strike against GM later that year. 

GM resolved the issue by selling the plant to Lordstown Motors at a value price,
and by offering some assistance to the new company as it worked to get its electric pickup ready for production.
That factory gives Lordstown a notable advantage over rivals including Nikola, which has an electric pickup prototype, but as of now, no place to build it. 

The Endurance, unveiled in June, has already drawn interest from commercial-fleet operators.
Lordstown said that it has over 27,000 pre-orders for the truck, representing more than $1.4 billion in potential revenue. 

Lordstown is led by Steve Burns, the former CEO of electric-delivery-van maker Workhorse Group (NASDAQ:WKHS). 

How Workhorse fits into this deal

Workhorse didn't just give Lordstown its CEO. It also licensed some of its designs and technology to the company. In exchange,
Workhorse received a 10% stake in Lordstown, along with an agreement that protects that stake from dilution for two years.
Workhorse is also entitled to a 1% fee on all debt and equity raised to fund Lordstown during that two-year period. 

Simply put, while Workhorse isn't named as an investor in the deal with DiamondPeak, it stands to benefit:
10% stake will be worth about $160 million at the post-merger company's pro forma $1.6 billion valuation,
and possibly much more as Lordstown ramps up to production next year. 

Who is DiamondPeak Holdings?

We don't know a whole lot about DiamondPeak yet. We do know that it's a SPAC formed by the energy-investing group at Silverpeak Capital,
a New York-based private equity firm; and David Hamamoto, a serial entrepreneur with a long track record of investments in real estate and healthcare companies. 

Hamamoto is DiamondPeak's CEO; he will join the combined company's board of directors. In a statement on Monday,
Hamamoto said that DiamondPeak evaluated "hundreds of companies" over the last year before settling on Lordstown Motors. 

[-chart]g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/585469/lmc-complex_march-2020_003.jpg&w=2000&op=resize[/chart]
 

 

What should investors make of this?

My take is that while any vehicle start-up is a risky investment, Lordstown is a no-nonsense company with a promising product.
The Endurance is a sturdy four-wheel-drive pickup with some innovative features, notably a complete motor unit at each wheel.
That should simplify manufacturing, lowering costs and maintenance, which is important to fleet customers.

What's the company worth? It's hard to say right now, but we'll have more financial details once
DiamondPeak publishes the proxy asking its shareholders to vote for the merger later this year. 

In the meantime, if you're one of the many auto investors watching the electric-vehicle-start-up space with interest,
this is a credible effort that deserves a spot on your watch list. Stay tuned.

John Rosevear owns shares of General Motors. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 
Shs Float 27.00M
 
Shs Outstand 35.00M
 
Short Float 0.09%
 
Insider Own 3.57%
 
Inst Own 65.80%
 
Debt/Eq  NO DEBT 0.00
Book/sh 7.87
52W Range 9.50 - 10.99




[-chart]finviz.com/chart.ashx?t=RIDE&ty=c&ta=1&p=d&s=l[/chart]
 

 


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02-07-2021
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RIDE News: Lordstown Motors To Race Endurance Electric Pickup Truck Skateboard in San Felipe 250 Race in Baja California on April 17 02/17/2021 07:00:00 AM
RIDE News: Amended Statement of Ownership (sc 13g/a) 02/16/2021 06:31:55 AM
RIDE News: Amended Statement of Ownership (sc 13g/a) 02/16/2021 06:19:49 AM
RIDE News: Lordstown Motors falls 6% after Morgan Stanley warns on execution risk 02/12/2021 07:35:15 AM
RIDE News: Amended Statement of Ownership (sc 13g/a) 02/11/2021 04:25:00 PM
PostSubject
#5  Sticky Note $DPHC best New EV play without any drama. FALCON 1 08/03/20 10:50:33 AM
#478   what got cancelled? uksausage 02/27/21 03:59:49 PM
#477   WHY THEN DID IT GET CANCELLED mick 02/27/21 03:56:28 PM
#476   WHY THEN DID IT GET CANCELLED mick 02/27/21 03:56:28 PM
#475   yes but not by RIDE as they were uksausage 02/27/21 03:55:13 PM
#474   BECAUSE I HEAR TO BE CHALLENGE mick 02/27/21 03:49:16 PM
#473   why discuss this on RIDE board they didnt uksausage 02/27/21 03:46:24 PM
#472   who will make them [$OSK ?????] 'Lordstown mick 02/27/21 03:36:44 PM
#471   $OSK ????? WINS ????? WINS BUT WHY ????? mick 02/27/21 03:35:22 PM
#470   Lordstown Motors Cor (RIDE) mick 02/27/21 03:34:48 PM
#469   Lordstown Motors Cor (RIDE) mick 02/27/21 03:34:48 PM
#468   This is racketeering. The Dealers are fighting to KMC-1 02/25/21 12:42:58 PM
#467   Lordstown Motors discusses sales rollout of all-electric pickup truck. WeTheMarket 02/25/21 08:28:51 AM
#466   Isn't that weird?? I thought the same thing KMC-1 02/24/21 10:08:25 AM
#465   I totally agree... this is all under the KMC-1 02/24/21 10:05:38 AM
#464   $OSK ????? WINS ????? WINS BUT WHY ????? mick 02/24/21 10:00:23 AM
#463   I'm thinking the same thing, although I missed KMC-1 02/24/21 09:54:37 AM
#462   I don't see how Oshkosh can even stay KMC-1 02/24/21 09:52:53 AM
#461   incredibly some people uksausage 02/24/21 08:08:53 AM
#460   Loaded the dip yesterday... Shouldn't be here for long Golden_Cross 02/24/21 07:17:37 AM
#459   would $goev make good partner wit 'Lordstown mick 02/23/21 08:10:03 PM
#458   Awfully quiet in here considering the last week KMC-1 02/22/21 05:34:53 PM
#457   Lordstown motor CEO Steve Burns interview on CNBC WeTheMarket 02/19/21 04:17:57 PM
#456   RIDE and RMO were negatively impacted today by Norton1973 02/13/21 02:03:08 AM
#455   Gee, thanks Morgan Stanley! Execution risk?! Glider549 02/12/21 09:56:57 AM
#454   CEO of Lordstown Motors interview ... BornAgain 02/06/21 04:20:01 PM
#453   https://otcbb.swingtradebot.com/equities/RIDE N.Y. , NASDAQ mick 01/31/21 10:26:15 PM
#452   $RIDE is starting to look interesting! BornAgain 01/27/21 11:43:06 AM
#451   Not totally true. WKHS owns 10% of RIDE not uksausage 01/26/21 10:43:25 PM
#450   USPS is about to plug into electric mail barnyarddog 01/26/21 10:36:04 PM
#449   https://www.investors.com/news/ev-stocks-lordstown-hits-orders-milestone-faraday FLY HIGH NOW 01/13/21 12:39:04 PM
#448   https://finance.yahoo.com/news/lordstown-motors-corp-advances-next-123000404.htm FLY HIGH NOW 01/13/21 12:38:41 PM
#447   So wrong.. scotsand 01/11/21 10:44:34 PM
#446   Reason for todays rise uksausage 01/11/21 12:32:28 PM
#445   FORCE for KNOWLEDGE MIMadman 01/08/21 06:59:21 PM
#444   CRANK IT UP! https://youtu.be/qqDKpwyzBT4 Glider549 01/07/21 09:10:51 PM
#443   https://pennystocks.news/otc/?symbol=RIDE mick 01/03/21 03:16:34 PM
#442   EVEN THOUGHT WENT ON WIT SPAC ????? mick 01/03/21 03:16:20 PM
#441   Lordstown Motors Cor (RIDE) mick 01/03/21 01:21:07 PM
#440   try again. uksausage 01/02/21 10:23:01 AM
#438   $RIDE Their Total Cash is ONLY $68.88k Timmmmmmmmber SpotOnTrade 01/01/21 02:50:06 PM
#437   Nope. Warrants have been called for redemption. Call SilverKnightLV 12/29/20 06:51:51 PM
#436   Why This Lordstown Motors Analyst Is Bullish Ahead MIMadman 12/23/20 03:37:08 PM
#435   I got me some $RIDEW yesterday at $9!I Jbo2 12/23/20 10:49:16 AM
#434   Thanks, I added yesterday!!! MIMadman 12/22/20 04:21:59 PM
#433   It typically dips to high teens then goes texastornado 12/22/20 04:17:39 PM
#432   I think we found the floor. I'll MIMadman 12/22/20 04:15:06 PM
#431   MONSTER RUN in the cards here. Load texastornado 12/22/20 03:50:57 PM
#430   Nice Twitter note this AM FastMny 12/21/20 11:19:40 AM
#429   Agree. I have a good feel on this. Rogue3 12/18/20 01:47:31 PM
#428   what vote jsc52033 12/18/20 11:19:43 AM
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