Since selling is half of the investing equation, we asked some of our contract writers to share some of the lessons they’ve learned over the years!

Arrival

What it does: Arrival is a British electric vehicle manufacturer that plans to revolutionise the production of EVs with its cost-effective micro factory model.

By John Choong. Like many SPACs and IPOs during the bull market of late 2020 and 2021 promising sky-high achievements and billions in profits, Arrival (NASDAQ:ARVL) was no different. The company had IPO’d at a premium of over $20 at that time, promising billions in profits by 2025 with production no where in sight. Mistakenly at that time, I started a sizeable position, attracted by the allure of potentially doubling or even tripling my money.

How wrong I was as the firm burned through cash faster than a race car burns through fuel. Consequently, Arrival had to conduct multiple capital raises along with numerous project delays. The result of all of this is that its share price is now down by a heart-wrenching 99% from its IPO levels.

Since then, the group is yet to produce a single vehicle for public use and could run out of cash before the year ends. This was an expensive lesson in taking valuation models seriously. That said, if Arrival can secure additional funding and make good on its promises, the upside potential from its current share price could be massive.

John Choong has no position in any of the shares mentioned.

boohoo

What it does: boohoo is a British online fashion company that owns a number of brands.

By Edward Sheldon, CFA. Right now, there are a number of stocks in my portfolio that I wish I’d never bought. But one, in particular, that’s worth highlighting is boohoo (LSE: BOO). I bought this stock in an effort to capitalise on the global online shopping boom. Currently, I’m down about 80% on my investment.

The good news is that I’ve learned a few valuable lessons from my losses here. One is that it’s really important to focus on a company’s ‘economic moat’. Can it do something that other companies can’t?

In boohoo’s case, it became apparent last year that the company didn’t have that much of a moat because Chinese rival Shein was able to capture significant market share from the British company quite easily.

Another lesson is that if a stock’s short interest increases significantly (as boohoo’s did last year), it’s often just sensible to sell it. Rising short interest indicates that sophisticated institutional investors are increasing their bets against the stock.

Can boohoo shares bounce back? It’s possible. It does own some powerful brands such as PrettyLittleThing and Debenhams. And supply chain/inflation issues that have plagued the company in recent years should start to moderate soon. I’m not expecting to break even any time soon, however.

Edward Sheldon owns shares in boohoo.

boohoo

What it does: boohoo is an online fashion retailer, targeting younger buyers in the UK.

By Alan Oscroft. Shares in boohoo (LSE:BOO) are down around 80% in five years, and have lost almost 90% of their value since a peak in 2020.

So what do you do when shares you own fall in price, and you think they look cheap? Well, I bought more. And then watched them drop even further.

I didn’t think the company’s troubles would turn out so bad. But what does it look like today?

It’s difficult to put a valuation on the shares right now, as analysts expect earnings losses for the next couple of years. On a price to book value basis of around 1.25, the stock could be good value, though.

For the year just ended, revenue fell 11%. It was still up 43% since 2020, and the firm did report positive adjusted EBITDA. It looks like there’s sufficient liquidity too.

I’m tempted to buy more, again. But I’ll resist, and just keep watching.

Alan Oscroft owns boohoo shares.

boohoo

What it does: boohoo designs and sells clothing, shoes, accessories and beauty products

By Paul Summers: Things have been pretty awful for online retailers over the last couple of years. One high-profile victim of multiple economic headwinds, including the cost-for-living crisis, has been boohoo (LSE: BOO). Corporate governance concerns haven’t helped either. 

Sadly, all this has led to it becoming by far my worst-performing holding.

On a positive note, boohoo still has net cash and is trading in line with guidance. Looking ahead, a new US distribution centre will drive efficiencies and help reduce customer waiting times. Supply chain costs are also expected to be lower.

But a recovery will take time. Profitability has dived and I’m struggling to see how it will return to levels seen during the boom years.

As a Fool, I always try to take a long-term approach to investing. However, my patience is being sorely tested here. The next update will probably determine whether it stays in my portfolio. 

Paul Summers owns shares in boohoo.

Butterfly Network

What it does: Butterfly Network makes portable handheld ultrasound devices and associated software.

By Ben McPoland. There are many shares I wish I’d never bought, but Butterfly Network (NYSE: BFLY) springs to mind instantly.

Why do I regret this one? Well, a painful 84% drop in the value of my investment is one BIG reason why. A quick check of my ISA informs me that after a couple of years my £500 investment is now worth just £80. Ouch!

Now, I’ve made poor investments before and I’m certain I will again. But why this shocker grates on me is because I bought into a story (and seemingly not much else).

The story was that Butterfly’s portable ultrasound-on-a-chip device would essentially replace the doctor’s antiquated stethoscope. Medical practitioners would increasingly use Butterfly’s ultrasound, as well pregnant women at home, and growth would skyrocket.

While that may eventually turn out to be true, the firm’s sales growth has stalled while big losses continue. The CEO left last year. So I’m hanging on to my shares more in hope than expectation nowadays.

Ben McPoland owns shares in Butterfly Network.

The post 5 stocks Fools wish they never bought appeared first on The Motley Fool UK.

Being productive

Arrival didn’t exactly cover itself in glory when it reported its most recent Q2 results. It disappointed on many fronts with more delays, which led to a huge sell off in its stock. Nonetheless, there were a couple of bright spots that are worth pointing out.

The first would be that the company saw yet another increase to its memorandum of understandings and orders, from 143k in Q1 to 149k in Q2. This now adds up to a total of approximately $6bn in potential revenue. But most importantly, it reaffirmed its commitment to start production this quarter. CEO Denis Sverdlov mentioned on the earnings call that the microfactory concept is coming to fruition, expressing his excitement and entrepreneurial spirit to radically change the traditional assembly line.

Yet another delayed Arrival

I’m afraid that’s about it for good news, unfortunately, as the rest of the report was mostly disappointing. Despite the firm confirming start of production in Q3, this is only for 20 vans, which is down from the initial 400 to 600 vans promised in the Q1 earnings report. This is because of cash preservation reasons, as well as the manufacturer only having enough parts for 200 vans currently. Arrival also doesn’t expect revenue to come in this year either due to the timing of these deliveries, which are expected to happen at the very end of the year.

To make matters worse, the company is having to dilute shareholders like myself once again. Sky-high inflation has forced the unicorn to seek additional capital. This is being done through an at-the-market (ATM) offering, worth $300m. Arrival plans to sell its shares into a secondary trading market, with $90m expected to be raised this year, and another $210m in 2023. The offering should give it enough cash until the end of 2023, with CFO John Wozniak guiding for it to finish 2023 with at least $300m in cash and equivalents.

That being said, it continued to burn through quite a substantial amount of cash in Q2. As such, it’s had to conduct some cost-cutting measures by putting its bus and car projects on pause until additional capital can be raised, while also cutting spending by 30%.

Lagging behind

Admittedly, Arrival has a great vision with wonderful economics, which was why I chose to invest in its stock. However, numerous delays and disappointments have only made me doubt whether this radical innovation can truly be executed.

With the company continuing to burn cash, profitability isn’t expected anytime soon. Although the board expects margins to reach breakeven by 2024, I can only imagine that it’s another empty promise after so many disappointments.

Arrival has had a terrible record of over promising and under delivering. So, I’m taking any future outlook with a big pinch of salt. Therefore, I don’t think the stock will be hitting $2 soon, and I won’t be adding to my position. Instead, I’ll be looking to purchase other stocks with better track records.

The post Will Arrival stock hit $2 anytime soon? appeared first on The Motley Fool UK.

Arrival

Arrival (NASDAQ: ARVL) can be easily dismissed as another electric vehicle company. However, what makes this growth stock unique is its approach to producing vehicles. Arrival aims to utilise its in-house technologies to produce rapidly scalable microfactories around the world.

With an estimated cost of $50m, these factories can be set up in a matter of months. Not to mention, they are also 24 times smaller than most other factories. This model allows each factory to achieve unprecedented growth, with an annual gross margin of $100m, producing 10,000 vans a year.

Nonetheless, Arrival now trades at a mere $1.44 after losing 95% of its value from its all-time high. This was the result of an overpriced valuation, delays, and share dilution. That being said, I think the stock is now fairly priced given that its market cap ($920m) is now lower than its total assets ($1.5bn).

After numerous delays, start of production for its vans is set to begin this quarter. This leaves me excited as a long-term investor. Provided that all goes according to plan, I think this growth stock could be a huge winner for years to come.

Astra Space

Astra Space (NASDAQ: ASTR) is a company targeting a niche portion of the space launch market. The firm offers to deliver payloads that are less than 300 kg to low earth orbit (LEO) while charging the most affordable fees.

The company has experienced unprecedented growth in its route to getting to space, as it’s the fastest space launch company to reach orbit. Its cheap method of producing rockets is what sets it apart from the competition. Even with a base launch cost of $2.5m, the Alameda-based firm is twice as cheap as its nearest competitor, Rocket Lab. This has allowed Astra to secure a backlog of over 50 launches with the likes of NASA, Spaceflight, Planet, and many others.

Having said that, Astra has also suffered a monumental drop in its share price of 80% this year. The current bear market hasn’t done growth stocks any favour either. Fears of a potential recession have soured investor sentiment and kept share prices low. Nevertheless, if Astra can manage to somehow deliver on its promises of daily launches by 2025, its current share price is going to be a steal.

Stunted growth?

Given the tremendous amount of potential from these growth stocks, are they a buy? Well, it’s important to note that while these companies have the potential to deliver a monumental return on investment, they can also fail.

I’m definitely intrigued by Arrival’s growth prospects. Even so, its cash position leaves me worried. With just $500m of cash, the unicorn has proposed restructuring its business. On the other hand, Astra has gone quiet since its most recent failed TROPICS launch. With no word from management as to what lies next for the company, I think there’s too much risk involved to buy more shares. As such, I’m holding onto both my Arrival and Astra positions for the time being.

The post These 2 growth stocks could be huge winners in the next decade and beyond appeared first on The Motley Fool UK.

A little goes a long way

In the sea of electric vehicle companies, Arrival is still a small fish. But what makes the British unicorn so unique is its microfactory concept. Each factory can produce 10,000 vans. It is also estimated to have a low capital expenditure rate of £50m, while turning over £100m per year. This would cost much less than a traditional factory. Additionally, a microfactory only takes up 20,000 square metres. Pair this with its modular production method, and Arrival can quickly adapt to demand in an area, rent a small warehouse, and start production.

Nonetheless, this is still a concept and is yet to be proven. As such, I remain cautious. However, successful execution could very well alter the traditional assembly line that Henry Ford once pioneered, and change how vehicles are produced.

Much needed Arrival

Having achieved bus certification last month, the Nasdaq-listed firm could begin trials with one of its biggest customers, FirstGroup. Arrival also recently partnered with Enel X, a market leader in advanced energy solutions. The partnership will test Enel X’s advanced charging services on Arrival’s buses. A successful trial could results in additional orders to Arrival’s 143,000 letters of intent (LOI).

The success of these tests will be a key building block for Enel to include the Arrival Bus within its portfolio of global electrification solutions.

Source: Arrival Investor Relations

More importantly though, was the achievement of van certification this week. The van makes up 96% of the company’s current LOIs, so this was extremely good news. Consequently, Arrival shares exploded 15% on the news. This also puts the firm on track to start its van production in Q3. With 400 to 600 vans expected to be produced by the end of this year, this will bring in the company’s first batch of revenue.

Foggy road ahead

That being said, Arrival has an uncertain path ahead. While the Bicester-based company expects to finish the year with $150m to $250m of cash, it still won’t be sufficient to run its operations for 2023 and onwards. This worries me as an investor.

A stock offering is unlikely given its already low share price. Not to mention, dilution would potentially lead to its share price falling below $1, and getting delisted from the Nasdaq. Therefore, Arrival may have to take on debt, which will be costly in a high interest rate environment. This would also make its road towards profitability a much longer one, as future earnings would go towards repaying its debt.

Nevertheless, the average target price for the stock is currently $5.98, which presents a 350% upside! Although I doubt the share price will climb to such levels, I think there’s a decent chance the stock can grow by 100% if it sticks to its production guidance. This is why I’m currently holding a small position in Arrival shares.

The post Here’s how Arrival shares could double my money! appeared first on The Motley Fool UK.

Arrival of bus certification

When Arrival last reported results, management mentioned the priority was to complete its biggest obstacle, vehicle certification. Therefore, the recent EU bus certification is a confidence booster, as the Nasdaq-listed company can now begin public road trials in the UK and Europe. These are expected to start in the next quarter. Private road trials with First Bus drivers are already in progress.

Good intentions

One of the most important metrics to pay attention to is letters of intent (LOIs). This determines the number of potential orders Arrival has in its books, indicating future revenue. LOIs saw yet another increase to approximately 143k. Despite the growth rate decreasing to 7%, I’m just glad to see that demand continues to be strong. When questioned about this on the earnings call, President Avinash Rugoobur attributed the slowdown to a shift in focus. He stated that the sales team is now in the process of converting these LOIs into binding orders.

Additionally, the milestones set out by Arrival in the previous quarter were also met. Aside from the all important bus certification, the startup completed its final prototype for its van.

We have already passed over 70% of our Van certification tests and made strong progress on our Microfactories with our cabin, hoop and skateboard all assembled using our advanced robotics platform.

Source: Arrival Q1 2022 Financial Results

Arrival has also been proactive in its equipment installation at Bicester. It has assembled and installed all robotic technology required for vehicle assembly. As such, I’m confident in Arrival’s ability to produce its target of 400-600 vans this year.

Micro factors

With all that being said, Arrival still sparks some pessimism in me. While its cash position is strong enough to last the financial year, what lies ahead is unknown. The EV firm still expects to finish the year with a cash balance of $150m-$250m. CFO John Wozniak has made no secret of Arrival’s need to raise capital in the near future. Capex continued to hover around high levels of $99m, although this is expected to taper off from Q3 onwards, as mentioned on the earnings call. CEO Denis Sverdlov mentioned that the business may face issues sourcing materials in the medium term as well. This could hamper its optimum production rate of 20,000 vehicles a year, per factory.

The bright side, however, is that Arrival continues to prove its doubters wrong. Its microfactory production concept is starting to show promise. With a positive set of results and promising guidance for the future, I’ll definitely be looking to add to my position in Arrival. This is especially so when the Arrival share price is trading at 95% off its all-time high.

The post Here’s why the Arrival share price just soared! appeared first on The Motley Fool UK.

Electrifying prospects

Arrival has created a standard electric vehicle platform that allows it to save costs. This is because the platform serves as the foundation for multiple vehicle categories such as buses, vans, and cars. This, paired with the EV manufacturer’s groundbreaking microfactory concept, makes its manufacturing process extremely efficient. Its microfactories have interchangeable cells, allowing for production of different vehicles, and up to 10,000 vans a year. Therefore, production can be executed on scale without the need for building massive factories.

Arrival has already secured orders from several companies such as UPS, LeasePlan, and FirstGroup. Its number of letter of intents (LOI) also saw a monumental increase to approximately 134k vehicles in its latest earnings report. This goes to show that the firm is gaining traction from renowned companies globally with plenty of tailwinds.

UPS and downs

Arrival’s biggest customer by far is UPS, which is also an investor in the business itself. The courier giant placed an order for 10,000 vehicles last year, with an option for a further 10,000. Management disclosed that it expects the start of production on its Arrival vans in Q3 this year. UPS also announced on its earnings call that it’s expecting 400 to 600 vans to be delivered by the end of the year. Nonetheless, the next hurdle the EV firm faces is getting its van certified. It expects this to be completed by Q2.

As a shareholder, I will admit that I am slightly worried. The expected production numbers this year are lacklustre to say the least. With the company continuing to burn cash without any revenue, 400 to 600 vans isn’t going to cut it. Although CFO John Wozniak mentioned that Arrival expects to end the year with $150m in cash, he also reiterated the firm’s intention to raise capital in the near future. This is to allow Arrival to scale production to meet its ever-increasing LOI numbers.

The Arrival share price is already sitting at penny stock levels, so any equity funding would be a waste at this price. As such, the company will most likely have to take on debt, which isn’t ideal in a high interest environment.

Delayed arrival

To add to my worries, Arrival is yet to announce the confirmation of its bus certification. This was expected to be completed by Q1. Additionally, the company has also postponed the release of its full financial results twice. These factors don’t bode well for its reputation. As a result, I am worried that Arrival may not even be able to hit its van production targets. Consequently, due to Arrival’s complacency, I will not be looking to buy more shares in this EV growth stock for my portfolio.

The post Could this EV growth stock be about to explode? appeared first on The Motley Fool UK.

Letter of intents (LOIs) and non-binding orders DOUBLED

In a pre-revenue company like Arrival, all eyes are on the magic figure that is number of potential orders in order to guarantee future cash flow and revenue. Arrival managed to wow investors with a staggering c.134k in non-binding orders and LOIs in Q4 2021, double of what they had in the quarter before (64k), which is shockingly impressive to me. With share prices of pre-revenue companies subject to future cash flows, this will definitely bring an upside to Arrival’s target price.

Everything is on track

Denis Sverdlov and his team have managed to maintain a strict timeline following the revised outlook given in the last quarter. As expected, trial bus production and proving ground trials in Spain were successful. Bus certification and public road trials with First Group is also expected to go ahead this quarter, with British roads potentially seeing up to 193 of Arrival’s new electric buses following the completion of successful trials. Moreover, UK production of buses will start by mid-year, thus bringing in the first batch of revenue, leaving investors such as myself extremely excited.

In the other lane, public road trials for the van were successful in Sweden with more tests still being conducted. The van is on course to complete its public road trials soon, with full product certification expected in both the EU and UK shortly, along with the start of production in autumn. Arrival expects 400-600 vans to be built this year, with delivery of those vehicles to UPS and select customers, guaranteeing further revenue.

Cash in the bank

The main worry with many pre-revenue companies is whether they can sustain a healthy level of cash before achieving profitability. These worries were quashed as cash and equivalents went up to $905m following the company’s notes offering in November. With cash expected to burn at $655-755m this year, Arrival might just be able to get through the pre-revenue period without having to dilute any further as cash is expected to flood in with their first orders of buses and vans later this year.

Shortages

On the earnings call, there were concerns about material and semiconductor shortages for vehicle production. Although President Avinash Rugoobur mentioned that the electric vehicle manufacturer has stockpiled enough raw materials for production for 2022, it could still potentially face shortages in the future as lead times continue to increase. For that reason, revenue for 2023 and beyond could be at the mercy of raw materials and their prices.

Nevertheless, it was the perfect earnings call to my mind, and management really seem to know what they are doing. The company is in an extremely healthy position, and learning how to walk before running is key at this stage. For those reasons, the share price saw an increase today, and I am happy to increase my stake in Arrival.

The post What just happened to the Arrival share price? appeared first on The Motley Fool UK.

So, why have the shares taken such a huge hit this week? And has the share price weakness provided a good buying opportunity for me?

Why Arrival’s share price just tanked

The reason the share price has fallen is that the company’s third-quarter 2021 results, posted on Monday, were not great.

One thing that disappointed investors was the loss for the quarter, which at €26m, was larger than the loss in the third quarter of 2020 (€22m).

What really spooked the market, however, was the fact that the company advised that it has “revised its Microfactory rollout” and now expects “significantly lower” vehicle volumes and revenue in 2022.

The company noted that as a result of the revision to its rollout schedule, previous long-term forecasts (it was previously expecting revenue of around $1bn for 2022) should no longer be relied upon.

Investors hate it when companies fail to deliver on their guidance, so it’s no surprise that Arrival’s share price took a hit on this news.

Should I buy Arrival stock now?

As for whether I should buy the stock for my portfolio, I’m not convinced that buying now is the best move.

Don’t get me wrong, there are certainly things to like about it from an investment point of view. For starters, the group’s ‘Microfactory’ strategy should allow it to keep production costs low. These mini factories cost just $50m to set up. To put that in perspective, Tesla just spent $5bn to build a large-scale production plant in Nevada. This approach to production could help Arrival earn larger profits than its EV peers in the long run.

Secondly, the group already has about 64,000 non-binding orders. One company that has placed an order with Arrival is United Parcel Service (UPS), which is one of the world’s largest couriers. It has placed an order for 10,000 vans, which is very encouraging.

What concerns me, however, is the stock’s valuation. At the current share price, Arrival has a market cap of nearly $9bn. That’s high, to my mind, given that the company is yet to generate any revenue.

It’s worth pointing out that at present, around 17m Arrival shares are on loan (being shorted). That equates to short interest of about 11%. This indicates that I’m not the only one who sees the valuation as high. Clearly, a lot of institutions expect the share price to fall.

Given the high valuation, the lack of revenues, and the interest from short sellers, I’m going to leave Arrival stock on my watchlist for now. All things considered, I think there are better growth stocks I could buy at the moment.

The post Arrival’s share price just hit $14. Is now the time to buy the stock? appeared first on The Motley Fool UK.

While the company is listed in the US, it’s based in the UK. It’s also setting up one of its two initial factories over here. 

Different mindset 

Like peer NIO, Arrival is approaching EVs with a different mindset. NIO introduced interchangeable battery packs to extend vehicle range, and Arrival is trying to reduce production costs with so-called micro-factories.

These factories require less upfront capital investment, which means the company has lower capital demands than its peers. Indeed, setting up a vehicle manufacturing facility can be incredibly expensive. And the costs of the facility can make it difficult for a producer to earn a sustainable profit. 

For example, Tesla has only just reached profitability as it’s been spending billions on new factories to reduce costs and increase output. Its gigafactory in Nevada cost $5bn, and a facility in Europe will cost another €4bn. Tesla can afford this. Most of its smaller competitors can’t.

Amazingly, Arrival reckons its facilities will cost around $40m. That could give the company a tremendous competitive advantage in the EV arms race. 

The company has streamlined the entire production process. To reduce costs, there’s no stamping or welding in the production process. Vehicles are made out of a composite material, which can be coloured to remove the need for painting. The vehicles are also lighter. 

Unlike many other early-stage companies, Arrival already has customers. It has received non-binding orders and letters of intent for 59,000 vehicles. Based on these targets, management reckons the company can generate $1bn of sales by 2022. With a low cost of production, profits could follow quickly. 

The outlook for Arrival shares 

All of the above suggests to me that Arrival shares do offer something many stocks in the space don’t. The company seems to have a cost edge over the rest of the market, implying the firm could become profitable before many of its peers. 

Having said all of the above, the business will have to overcome some significant challenges during the next few years. For a start, competition is growing in the EV market. Fighting off deep-pocketed competitors like Tesla isn’t going to be easy.

As such, I think investors like me should take the company’s sales targets with a pinch of salt. There are also funding concerns to consider. Until the group’s earning cash, it’ll have to rely on the kindness of strangers (investors) to support production and capital spending. 

Despite these risks, I think the firm’s technology is exciting. That’s why I’d buy Arrival shares for my portfolio today as a speculative growth investment. This should allow me to profit from any upside and limit losses in the worst-case scenario.

The post Should I buy Arrival shares for my portfolio? appeared first on The Motley Fool UK.

Arrival share price outlook

Arrival started trading on 25 March at $22 per share. It raised around $660m at IPO, valuing the company at approximately $13.6bn (£9.5bn). This is a very impressive debut. The company is operating when the push for electrification has never been greater. But could it be benefiting from hype more than belief?

It has major ambitions, with a target of $1bn in revenues next year and $14bn by 2024. It hopes to become profitable in 2023. However, I think it’s going to have its work cut out to fend off competition and meet those high targets. Amazon has already ordered 100k electric vans from Arrival’s competitor Rivian and Ford intends to release an electric transit van in 2023.

Innovative approach to electrification

The thing that sets Arrival apart from rivals in this highly saturated market is its innovative approach to manufacturing. The six-year-old company plans rapidly scalable micro-factories. They’ll be situated close to high demand areas and cost between $45m to $50m to set up. Arrival hopes to have 31 micro-factories in production by 2024. Each micro-factory should be capable of producing 10,000 vans or 1,000 electric buses annually.

This should ensure low capital expenditure with the company’s investor information citing lower capex than for established vehicle operations producing similar numbers.

The plan is to make these electric vehicles competitively priced against traditional internal combustion engine vehicles. And the company intends to mass produce its first electric bus before the end of 2021. United Parcel Service (UPS) has already placed an order for 10,000 vans with the option for 10,000 more.

Impressive backing

Arrival is financially backed by BlackRock, Kia and Hyundai. And the company has some impressive leaders on its board. For instance, Chairman Peter Cuneo previously took Marvel Comics through a 10-year transformation that led to its acquisition by Disney for $4bn in 2009. Plus, its global board of directors includes Tawni Nazario-Cranz, a venture capitalist at SignalFire and Rex Tibbens, the CEO of $4bn company Frontdoor.

SPACs became a popular IPO launchpad in 2020, and the trend continues. For the company, it’s easier than a traditional IPO, but often results in the founders giving away more equity than they would otherwise. There’s also concern that SPAC launches have become hyped with speculation, pushing share prices too high, only for them to crash back down. Time will tell if that’s the case with Arrival. 

The company will rely on lithium-ion battery cells from South Korea’s LG Energy Solution. But an industry-wide shortage of the raw materials required to manufacture lithium-ion batteries may lead to inflated prices.

The green revolution is raising investor interest in this area and with governments pushing for electrification it’s an exciting area to invest in. Nevertheless, the electric vehicle market is fierce and I think that only a few will thrive long term. Arrival is showing innovative determination and an impressive boardroom line-up, but competition is rife and costs are high. This makes me nervous and I’m not tempted to buy shares in it.

The post Arrival achieves impressive IPO share price! SPAC speculation or prime equity? appeared first on The Motley Fool UK.