GGPI Stock Could Spike Amid the Polestar Merger Announcement

There's a lot of chatter around a potential GGPI and Polestar merger. Bloomberg published a report about the potential merger back in July.

Anuradha Garg - Author

Aug. 17 2021, Published 3:11 p.m. ET

Polestar building
Source: Polestar

It has been over a month since the rumor started floating that the SPAC Gores Guggenheim (GGPI) could merge with premium EV manufacturer Polestar. On July 8, Bloomberg published a report saying that Polestar is in talks to go public through a merger with GGPI. It also added that the deal could value the company at around $25 billion. After the Bloomberg report, GGPI stock popped by 5 percent to reach its all-time high of $10.3 on July 9. Since then, the stock has mainly been flat. Will GGPI stock spike after the Polestar merger?

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Polestar is owned by China's Zhejiang Geely and Volvo Car AB. In April 2021, Polestar raised $550 million from outside investors led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding, and Zibo Hightech Industrial Investment. It expects to use the money to fund the production of the Polestar 3 electric SUV at the company’s South Carolina plant. The company currently has two models, Polestar 1, a plug-in hybrid, and Polestar 2, an all-electric vehicle.

Social media chatter about the GGPI and Polestar merger

Investing forums and social media are abuzz with chatter about this deal. People are speculating why it's taking so long for the deal to be announced after the initial Bloomberg report. People expect the definitive agreement to be announced soon. You might remember that a similar thing happened with CCIV and Lucid Motors. Bloomberg published a report speculating about the merger on Jan. 11 and the definitive agreement was announced 1 month and 12 days later.

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polestar  ev
Source: Polestar

Polestar’s expansion plans

On July 21, Reuters reported that Volvo Cars has struck a deal to buy out its parent company Zhejiang Geely Holding. The move could make Polestar’s potential IPO more attractive to investors. Also, Polestar is on an expansion spree, which involves:

  • Launching in nine more markets this year
  • Aiming to double the number of retail stores to 100 locations
  • Increasing the number of service points to more than 780 by the end of 2021 from the current 650
  • Adding more products to its portfolio over the coming years
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According to Polestar CEO Thomas Ingenlath, the company aims to expand at a similar rate in terms of new markets in 2022.

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Interestingly, Ingenlath has questioned the sky-high valuations of rival EV companies even if they haven't even made a car. He urged Polestar's rivals to get their priorities straight by putting climate change before aiming for high market valuations.

Will GGPI spike on Polestar merger news?

Polestar has strong credibility due to its ties to Geely and Volvo. The company’s management seems genuinely interested in a carbon-neutral future. Polestar is also expanding aggressively. Therefore, if a formal announcement regarding the deal is made, there's a high chance that GGPI stock will go up. The discussions are still in a very early stage. Any investment in GGPI before a definitive agreement is announced would be speculative for investors.


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