Ask any random investment analyst about projections regarding America’s roadways and chances are, you’ll come across a similar theme: electric vehicles (EVs) are the way forward. Indeed, according to Dayton, Ohio, Mayor Nan Whaley, “The transportation systems of the future will be built around electric vehicles, and now is the time to make a major leap forward.”
In a meeting with the U.S. Conference of Mayors, Whaley announced the formation of a new Conference Task Force on Electric Vehicles, aiming to accelerate the transition to EVs and to develop an infrastructure that will support this groundbreaking paradigm shift. Encouragingly, the entire political spectrum has increasingly supported such initiatives.
While it’s nearly impossible for a well-known issue to not suffer the often impudent churnings of politicization, fundamentally, climate change is not an ideological concern but a human one. According to the United Nations, “Climate change is affecting every country on every continent. It is disrupting national economies and affecting lives. Weather patterns are changing, sea levels are rising and weather events are becoming more extreme.”
Not surprisingly, EV popularity doesn’t rest exclusively in the U.S. but in other parts of the world as well, including emerging regions such as Southeast Asia. And it’s here where electrification-focused Arogo Capital Acquisition Corp. hopes to make a positive impact via its initial public offering (IPO).
When Is the Arogo Capital Acquisition IPO Date?
Inking its name on the IPO calendar on Dec. 27, Arogo Capital represents one of the last enterprises that will provide the sugar and milk atop a steaming cup of Joe on a Monday morning — arguably the time when everybody could use a pick-me-up.
Of course, the description above is terribly ironic since the IPO market has been nothing but pure fire. According to a Reuters report in earlier this month, “U.S. IPOs have totaled $301.26 billion in 2021, scorching past last year's record of $168 billion.” Further, another Reuters article mentioned that new listings “around the world raised a record $594 billion in 2021.”
This circumstance presents both pros and cons for prospective investors of Arogo Capital or any other public market debut. On the optimistic end, those who have been concerned about recent choppiness in the major indices can take comfort that the IPO segment refuses to wane in sentiment. But on the other end, history demonstrates that unbridled speculation may lead to monetary diversion away from productive uses, potentially causing a steep correction.
For Arogo Capital specifically, investors must be aware that the company downsized its offering. Initially, the electrification and mobility-focused firm filed with the U.S. Securities and Exchange Commission (SEC) its intention to sell 10 million units. Instead, it will enter the fray distributing 9 million units at a price of $10 each.
EF Hutton acts as the sole bookrunner for the deal. Arogo shares will trade on the Nasdaq exchange under the ticker symbol AOGOU.
As you can ascertain from its corporate identity, Arogo is a special purpose acquisition company (SPAC). Also known as a blank-check firm or shell company, a SPAC has no underlying operations. Instead, it initiates an IPO to raise funds in the hopes of attracting a merger with a potentially viable enterprise. Following the business combination, the SPAC drops its identity and assumes the brand of the target company. In return, the target then becomes publicly traded.
Although SPACs and their merger targets enjoy a symbiotic relationship, retail investors should realize the benefits and risks of SPAC-based IPOs. On the positive front, SPACs provide opportunities that wouldn’t otherwise be available since traditional IPOs require an extensive vetting process. However, on the other side, this vetting process represents an important buffer between unscrupulous agencies and an unwitting public.
To be clear, not all SPACs are the same, and some business combinations have performed well for investors. Still, the inherent nature of shell companies — particularly their dilutive potential — requires rigorous due diligence before proceeding.
Arogo Capital Acquisition Financial History
As a SPAC, Arogo Capital has no financial history other than the $90 million gross raise it will command in its IPO. Following the closure of the deal, management will place the funds raised in a trust account. Should Arogo find a merger target within the specified time — the SPAC has the option to extend its timeline up to 21 months — shareholders will vote to approve the merger.
Should the proposal be appealing enough, Arogo’s shareholders will be the equity owners (in proportion to their holdings of AOGOU stock) of the new enterprise. However, disapproving shareholders can redeem their shares at the initial offering price. Prior to pulling the trigger on this or any other SPAC, you should note that SPAC redemption rates have been around 50% in 2021, per The New York Times.
The above statistic alone provides a clear warning sign that due diligence is absolutely critical regarding SPAC-based IPOs.
Still, you must judge Arogo based on its specific profile, and this SPAC carries a relevance that may help it succeed amid a wave of less-than-heartening business combinations. Primarily, the company focuses on EV technology, smart mobility and sustainable transportation in the Asia Pacific market, with an emphasis in Southeast Asia.
To be fair, a SPAC does not have to follow through with its stated merger intentions nor is Arogo geographically limited to Asia. However, since the blank-check firm’s executive leadership team features core acumen and networks forged in emerging technologies within the Asian continent, Arogo skiing off-course would likely only materialize unnecessary challenges in its path.
Further, the global EV market is massive. According to the International Energy Agency, “More than 10 million electric cars were on the world’s roads in 2020 with battery electric models driving the expansion.” This stat compares favorably to the approximately 2 million units registered in 2016. The numbers will probably increase significantly from here as major automakers have made strong commitments to EV manufacturing goals by 2030.
Indeed, by that year, experts from ResearchAndMarkets.com project that EVs will represent nearly half (48%) of new cars sold. Given that EVs incorporate fewer moving parts, it’s never been easier for upstart organizations to disrupt traditional automotive giants, thus amplifying the case for AOGOU stock.
As well, ancillary businesses should profit handsomely because EVs present a classic chicken-and-egg problem: both ample infrastructure and EV sales are necessary for the transition to work. Therefore, Arogo enjoys myriad lucrative options.
Arogo Capital Acquisition Potential
Last year, Southeast Asia’s internet economy crossed the $100-billion level as the COVID-19 pandemic prompted consumers to use e-commerce services to meet their various needs.
The latest report from Reuters indicates that the regional online industry “is expected to grow from an estimated $174 billion in gross merchandise volume (GMV) by end-2021 to $360 billion by 2025, and $1 trillion by 2030, driven primarily by growth in e-commerce and food delivery, as consumers stuck at home turned to the internet.”
Overall, McKinsey & Company presents a compelling argument that the Asian continent’s growth engine could represent a $10 trillion opportunity over the next decade. And mobility, particularly EVs and other sustainable transportation methods, offers a sizable addressable market for AOGOU stock.
Still, cost structures will be a gargantuan obstacle. Even with all the latest advancements and economies of scale, the cheapest 4-wheeled EV costs just under $30,000, a circumstance that requires drastic improvement.
How to Buy Arogo Capital Acquisition IPO (AOGOU) Stock
Interested participants of Arogo’s IPO must acquire shares at the open, necessitating knowing how to buy stocks. For a quick recap, follow these steps.
Step 1: Pick a brokerage.
Your brokerage is among your most important non-trading decision. Therefore, narrow the best brokers to platforms that ideally suit your needs.
Step 2: Decide how many shares you want.
IPOs are risky, and SPACs are notoriously volatile. Therefore, choose a balanced share count to help mitigate downside movements.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
AOGOU Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
Although AOGOU isn’t available for pre-IPO purchase, platforms like Freedom Finance offer early access to many popular upcoming IPOs.
Electricity is Both Productive and Dangerous
With society shifting toward EV integration, Arogo Capital Acquisition sits atop one of the most relevant modern industries. However, roadway electrification will require substantial investment in infrastructure and heightened economies of scale, presenting obstacles for AOGOU stock.