Autonomous vehicle startup Aurora Innovation is in talks to go public through a reverse merger with the Reinvent Technology Partners Y (RTPY) SPAC. The deal could be announced as soon as Jul. 15. Is RTPY stock a good buy amid the Aurora merger news?
RTPY stock gained as much as 2 percent in premarket trading on Jul. 15. There isn't any official news yet from RTPY on the merger.
Who's RTPY's sponsor?
In its Mar. 2021 IPO, RTPY raised $850 million by offering 85 million shares for $10 each. The blank-check company, which targets the tech sector, was formed by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus. RTPY is led by CEO, CFO, and director Michael Thompson. Previously, Thompson co-founded BHR Capital.
The RTPY-Aurora merger news
On Jul. 15, Bloomberg reported that Aurora had agreed to go public via a reverse merger with the RTPY SPAC. The combined company’s valuation couldn’t immediately be determined, according to the people familiar with the matter. In Jun. 2021, TechCrunch reported that RTPY and Aurora were in talks to merge in a deal valued at $12 billion.
The RTPY-Aurora merger isn’t confirmed
No merger agreement has been signed yet, meaning the terms could change or that the talks could break down. Aurora and RTPY declined to comment on the matter.
Autonomous driving startup Aurora is a good acquisition target
Aurora is led by CEO Chris Urmson, and Hoffman is a member of the board of directors. In Mar. 2021, Aurora added Volvo Group to its list of partners for developing autonomous trucks, and earlier this year, Paccar and Aurora partnered on a similar deal. Aurora’s investors include Amazon, Hyundai Motor, and Kia Motors.
Aurora's technology is based on LIDAR technology, which uses lasers to create 3D images of the surrounding environment and track routes around obstacles. The technology allows cars to see farther and faster, which is crucial at highway speeds.
The best autonomous driving stocks
The global autonomous driving market is expected to grow to $24.1 billion by 2026 from $9.1 billion in 2021. Aurora has partnerships with Volvo, Toyota, and truck manufacturer Paccar. In Dec. 2020, Aurora bought Uber Advanced Technology Center, which is one of the other approved companies testing in Pennsylvania. Earlier this year, Aurora began testing self-driving shuttles in Las Vegas.
Aurora competes against Alphabet subsidiary Waymo, Ford, and General Motors. So far, Waymo claims to have driven tens of millions of miles on public roads in 25 cities throughout the U.S. Waymo One customers in Phoenix may request fully autonomous trips from the company’s fleet of more than 300 cars.
Should you buy RTPY stock on the Aurora merger news?
RTPY stock is a speculative play until the company announces an acquisition target. However, it's worth noting that RTPY’s management team looks strong and has a good track record of identifying and investing in private companies.