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If you had to choose which invention was the most important for the development of American society during the 20th century, you’d be hard pressed to find a better answer than the automobile. That’s according to USHistory.org, which states that not only did personal vehicles exponentially expand the range of household mobility, they facilitated multiple downwind economic paradigm shifts.
Although disruptive, the automobile’s cooperative nature — like a bow seeking an arrow — fostered myriad accretive institutions. Gas stations “began to dot the land, and mechanics began to earn a living fixing the inevitable problems. Oil and steel were two well-established industries that received a serious boost by the demand for automobiles.”
As well, travelers needed shelter on long trips, catalyzing the development of motels, especially along popular long-distance routes. Indeed, even “quintessential American foods — hamburgers, french fries, milk shakes and apple pies — were hallmarks” of the roadside diner.
Thanks to this radical paradigm shift, large communities no longer had to crowd inside urban centers but could instead widen sociological entropy, resulting in the beautifully flawed suburban sprawl. And now, the advent of autonomy, connectivity and electrification could give rise to another groundbreaking evolution in the automobile’s storied history, drawing intense interest for the initial public offering (IPO) of EVe Mobility Acquisition Corp.
When Is the EVe Mobility Acquisition IPO Date?
One of the larger public market debuts for the second complete week of December, EVe Mobility Acquisition nevertheless has massive competition to pique investors’ curiosity. For one thing, 2021 has been a banner year for new listings. With only half a month remaining, “U.S. IPOs have totaled $301.26 billion in 2021, scorching past last year's record of $168 billion,” per a Reuters article.
On one hand, that’s a major plus as it demonstrates strong and resilient demand for one of the riskiest platforms within the public investing arena. At the same time, stock trading on margin has been trending at ridiculously elevated levels. This dynamic implies that market weakness — let alone steep corrections — could result in large-scale margin calls, thus disincentivizing risk-on assets.
For now, though, the flood of listings in the IPO calendar provides some encouragement under the comfort-in-numbers philosophy. For EVe Mobility, which is focused on the next generation of mobility-related ecosystems, it inked its debut on Dec. 15. Under the terms of the deal, the Wilmington, Delaware-based firm offered 20 million units at a per-share price of $10. Each unit consists of one common stock and one-half of a warrant, exercisable at $11.50.
At the specified numbers above, EVe Mobility commands a market valuation of $277 million. Cantor Fitzgerald and Moelis & Co (NYSE: MC) represented the joint bookrunners for the IPO. Shares listed on the New York Stock Exchange under the ticker symbol EVE.U.
As you can surmise from the corporate name, EVe Mobility Acquisition is a special purpose acquisition company (SPAC). Unlike a traditional IPO, whose purpose is to expand a pre-existing business, a SPAC has no underlying operations. Instead, it uses an IPO to raise funds to attract a merger deal with a viable private enterprise.
Essentially, these SPACs — also known as blank-check firms or shell companies — offer a backdoor route to the public market. For the private enterprise, it can enjoy the benefits of an IPO without the onerous and lengthy vetting process associated with traditional new listings. For the retail investor, SPACs open ground-floor opportunities, somewhat similar to private-equity funding rounds for accredited investors.
However, everything that Wall Street brings to the table has pros and cons. Primarily, prospective participants in EVE.U stock should beware of the dilution risk of SPAC-based business combinations. On a year-to-date basis, SPACs have underperformed benchmark indices, so caution and due diligence represent non-negotiable action items.
EVe Mobility Acquisition Financial History
As a shell company, EVe Mobility has no financial history other than the money it will raise in its IPO. In this case, the offering will close on Dec. 17, and the funds EVe has raised will go into a trust account. Should the SPAC find a merger target and subsequently receive shareholder approval for a business combination, EVE.U stock will transition to the target’s brand identity.
What company management has in mind as a merger, though, is a mystery — and that’s the siren call of this peculiar investment vehicle. Average Joe and Jane investors can stake their claim on an early bird special, but the compromise is lack of visibility before the merger announcement. Violating this protocol may lead to serious repercussions with the U.S. Securities and Exchange Commission (SEC).
Nevertheless, prospective participants are usually not left completely unawares with their SPAC ventures. Typically, blank-check firms provide a prospectus mentioning their intended industry focus — although to be clear, they’re not bound to this disclosure. In this case, EVe seeks an opportunity within the autonomous, connected, electric and shared (ACES) mobility market.
As well, management is open to mobility subsegments, including (but not limited to) “manufacturing, hard and soft technology around autonomy, connectivity, subscriptions, digital retailing, financial services, insurtech, maintenance and repair, aftermarket, telematics, logistics and supply chain management.”
While the above description leaves open myriad merger possibilities, you should also note that ACES may epitomize one of the profoundest innovations over the next several decades. For instance, one of the problems of suburban sprawl is that per Britannica.com, it’s correlated with increased energy use, pollution and traffic congestion. However, the autonomy and electrification components of the ACES market alone could substantially mitigate this multi-billion-dollar dilemma.
Another sticking point for suburban sprawl is the “decline in community distinctiveness and cohesiveness.” In other words, society has become fractured, which the COVID-19 pandemic and the subsequent political stridency exacerbated. However, through connectivity solutions levered to the sharing economy, people will be incentivized to work together for common goals.
Really, the downwind benefits of ACES mobility are limited only to the imagination. However, McKinsey & Company provided a hard figure to the possible future. Its research indicates that the commercial autonomous vehicle (AV) market alone could reach a valuation of $1.6 trillion by 2030. The massive size of this total addressable market is what compels consideration for EVE.U stock.
EVe Mobility Acquisition Potential
According to the Center for Automotive Research (CAR), the ACES market “will enable new mobility paradigms, new companies and new business and revenue models that have the potential to alter the way consumers interact with vehicles. Taken together, new vehicle technologies and new mobility services contribute to advancing the shared economy.”
Therefore, depending on what subsegment of ACES the SPAC decides to wade into via a merger deal, the resultant business combination could grab a significant chunk of the addressable market. However, prospective investors must recognize the enormous challenges ahead.
As CAR mentioned, “Traditionally, vehicle technology trends happen very slowly and often include step-function advancements due to unpredictable innovation. Success in this environment usually relies on a variety of seemingly unrelated inputs, which are difficult to determine in advance.”
Also, autonomous driving experts warn that humans will still be necessary to operate these next-generation vehicles, at least for “a very long time.” If that is indeed the case, it may dampen the narrative for ACES developments, particularly in terms of reducing congestion.
How to Buy EVe Mobility Acquisition IPO (EVE.U) Stock
With EVE.U having launched recently, interested investors must acquire shares at the open, meaning that you’ll need to know how to buy stocks. Below is a quick refresher.
Step 1: Pick a brokerage.
Before you can place an order, you must have a brokerage account. With the best brokers competing on similar financial incentives, choose a platform that suits your needs.
Step 2: Decide how many shares you want.
IPOs are risky, and SPAC-based business combinations are no exception. Thus, choose a balanced share count to help mitigate potential downside.
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).
EVE.U 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.
While you can’t acquire EVE.U on a pre-IPO basis, those interested in new listings should open an account with SoFi Invest, which offers pre-IPO access for select opportunities.
Autonomy or Bust
Thanks to remarkable innovations in autonomous functionalities, the next evolution of mobility offers massive downwind economic potential, as did the combustion automobile in the last century. Still, huge technical challenges lie ahead, presenting a compelling but risky narrative for EVE.U stock.