From smartphones to electric vehicles, solid-state batteries have the potential to take market share from conventional lithium batteries. They're reportedly safer and deliver improved results thanks to their higher energy density. For Solid Power, this is precisely what's helping it thrive well enough to go public via a reverse merger with a SPAC.
Here's what we know about Solid Power's SPAC so far.
The Solid Power SPAC is legitimate.
It isn't a rumor anymore. A SPAC called Decarbonization Plus Acquisition Corporation III (NASDAQ:DCRC) has targeted Solid Power for a reverse merger. DCRC went public in May and quickly landed a merger partner well before the two-year deadline.
According to the SPAC's prospectus, "We anticipate this transaction will help pave the way for us to build on our leadership position in producing and selling all-solid-state batteries and materials to the EV industry."
Solid Power is joining a $1.2 billion team.
Together with DCRC, Solid Power will be worth $1.2 billion moving into the SPAC. The company is getting $600 million in cash for the deal, which means the two entities have similar valuations heading into the merger.
Solid Power stock is expected to list on the Nasdaq Exchange.
The current "DCRC" ticker will shift to "SLDP" after the merger is finalized. Solid Power will be a Nasdaq-listed stock, which is a sensible move given both of the companies' roots in the tech sector.
Backed by major automakers, Solid Power sees a SPAC deal in the billions
In May, Ford and BMW participated in a $135 million funding round for Solid Power. The fundraising efforts that helped Solid Power receive this capital were likely a part of a predefined SPAC structure, as their talks with DCRC would have started well before the announcement.
The fact that Solid Power has noteworthy backers doesn't necessarily translate to imminent success in the marketplace. The company still has to hold its own with a whole slew of other startups.
SLPD is going public later this year.
EV (electric vehicle)-related SPACs have been a big thing over the past year, with everyone from Nikola Corp. to Lucid Motors taking the route to go public. This startup corner has definitely been volatile. Lordstown Motors (NASDAQ:RIDE) dropping 54 percent YTD and lost its CEO and CFO in one fell swoop.
The prospectus reads, "This business combination is expected to close in the fourth quarter of 2021."
SLPD might adjust the timeline depending on market conditions, particularly those relevant to the EV and tech environment.
Should you buy DCRC stock before the Solid Power merger finalizes?
Due to the nature of reverse mergers, investors have the option of buying DCRC shares ahead of the Solid Power listing. The shares are down 10.55 percent on June 15 after a mild spike that occurred in response to the news.
Buying pre-merger SPAC shares is risky because mergers can (and do) fail. However, Solid Power investors like Ford and BMW give a sense of stability to the investment.