Tortoise Acquisition Corporation (symbol: SHLL) has announced their acquisition of Hyliion Inc. Hyliion is entering the industry of green energy trucking. Hyliion’s biggest competitors are Tesla and Nikola Motors. Their Mission is to “Be the leading powertrain provider of electrified solutions for the commercials vehicle industry”.
Hyliion has somewhat of a different approach to their business than their competitors and in my opinion, it positions them to run away with a large market share in their industry. Hyliion is making hybrid drive trains for commercial trucks that can be put into any model truck. For their target market, it would make sense that changing a fleet of trucks to a new form of energy than gasoline would be cheaper than to replace the entire fleet of trucks as a whole.
Hyliion also has a significantly lower 7-year cost of ownership than Tesla and Nikola. Another positive attribute that Hyliion has expressed in their investor conference call is that they have already acquired all of the capital they need to get to their projected volume of production.
Tortoise Acquisition Corporation shares have great capital appreciation potential. Nikola Motors, their competitor, traded under the ticker VTIA before their effective merger enabled them to trade under their NKLA ticker on June 4, 2020. On May 1st Nikola traded at $13. The shares under the new symbol have traded as high as $79 and were at $74.21 today (June 24, 2020) as depicted in the chart below.
Hyliion has not finished its effective merger but has started to appreciate as news circulates about Tortoise Acquisition Corp. Nikola Motors has appreciated to an arguably unrealistic market cap, given that they are a pre-revenue company. Still, it is my opinion that Nikola is trading at such an evaluation for two reasons:
- Their innovations are a thing of the future and moving forward their proprietary technology will be widely used in the trucking industry.
- There are a large number of Robinhood retail investors that have jumped on “the new Tesla” wave of investing in these clean energy or carbon-neutral companies with a mission to change the world.
The Charts above show the share price in red and (and on the left axis) and the number of Robinhood held shares of the stock in the green (and on the right axis). The masse of Robinhood traders could potentially jump-start the rise in Hyliion’s stock price when its merger becomes effective and it starts to trade under a new ticker symbol.
I believe that once Hyliion Inc trades under a new ticker symbol there will be an even greater influx of retail investors buying in which will push their market cap well above its fundamental value and the smart money will take profits and get out before its correction. This type of high growth investment carries a great deal of risk but also has the potential, in my opinion, to have a very large return on investment and potential the possibly best holding period return of the year.
Notice. This article was published on BullsNBears.com on June 29, 2020. The article was back dated to June 24, 2020, since it was the date the article was received from the analyst. This was the analyst’s first article published by BullsNBears.com.
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