CIIC Stock Price Increases Over 150% This Month: Why It Happened

By Amit Chowdhry ● December 4, 2020
  • The stock price of CIIG Merger Corp (NASDAQ: CIIC) is trading at over 150% over the past month. This is why it happened.

The stock price of special purpose acquisition company CIIG Merger Corp (NASDAQ: CIIC) is trading at over 150% over the past month. Here is an overview of why the stock price of the company surged this month.

Positive Stock Price Trigger: November 18 – Announcement About Merger With Arrival

On November 18, it was announced that British electric van startup company Arrival was merging with CIIG Merger Corp in order to get a U.S. listing at a market valuation of about $5.4 billion.

The CIIG Merger SPAC was established by former CEO of Remington Products and Marvel Comics Peter Cuneo. And Arrival founder Denis Sverdlov will remain CEO of the company.

Arrival said it was going to receive about $660 million through the deal — which is due to be completed in Q1 2021. And this includes $260 million that CIIG raised in its IPO last year and $400 million raised from institutional investors such as BlackRock.

Arrival is going to trade on the Nasdaq under the ticker symbol “ARVL.” And the company had received approval for the deal from shareholders — which also included delivery giant UPS and Hyundai Motor.

CIIC is going to own around 12% of Arrival’s stock. And the company’s investors and executives will own about 88%. Arrival had raised $118 million from BlackRock in October. 

Arrival is also known for working on self-driving technologies. And the company has an order of 10,000 electric delivery vans from UPS with an option for another 10,000. Altogether, Arrival has about $1.2 billion worth of orders.

And Arrival is known for running microfactories, which provides the company better efficiencies as it requires less capital than traditional manufacturing factories. The microfactories can be established within 6 months for about $50 million each and it can use existing commercial spaces and warehouses.

Arrival is expecting to report $1 billion in 2022 revenue; $5.1 billion in 203, and over $14 billion in 2024.

Positive Stock Price Trigger – December 2 – Interview Released Of Arrival’s President And Chief Strategy Officer

An interview with Arrival president and CSO Avinash Rugoobur was released on Bloomberg (transcript of the interview). In the interview, Rugoobur said that the company’s business plan highlights the ability to produce its electric vehicles for a price that is comparable to diesel vehicles.

And Rugoobur believes that buses and van fleet owners are going to quickly convert to Arrival’s EVs due to the reduced initial costs and the lower total cost of ownership.

Positive Stock Price Trigger: December 3 – Buying The Dip, Jim Cramer Recommends The Stock

Between November 24 and December 2, the stock price of CIIG dropped over 25% to $19.66 per share. A number of other electric vehicle companies saw a dip in their stock prices due to a broader market selloff around the same time. So several investors decided that was a good entry point to buy-in.

TV personality and investor Jim Cramer also said this week that he believes Arrival has the “best claim to be the son of Tesla,” according to CNBC.

“As much as I like this story, I think you can be patient,” said Cramer via CNBC. “But given how much this one already pulled back this week, I’m giving you my blessing to start picking at it tomorrow. Then I want you to wait for maybe a better pitch… If it comes down below $17.50, you can buy it hand over fist, because this one has the best claim to be the son of Tesla — or daughter, to break the tyranny of that awful cliche.”