Updated February 24th, 2024 at 13:47 IST

Lotus Technology makes modest Nasdaq debut following SPAC merger

Lotus Technology's American Depositary Shares (ADS) ended the day at $13.80, rebounding from earlier losses that saw the stock drop to $10.12.

Reported by: Business Desk
NASDAQ | Image:Nasdaq
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Luxury electric car manufacturer Lotus Technology saw a modest debut on the Nasdaq exchange on Friday, with its shares closing up 2 per cent after completing a merger with a blank-check acquisition company backed by private equity firm L Catterton.

Lotus Technology's American Depositary Shares (ADS) ended the day at $13.80, rebounding from earlier losses that saw the stock drop to $10.12. Approximately 190,000 shares were traded during the session. The special purpose acquisition company (SPAC), L Catterton Asia Acquisition Corp (LCAA), closed at $13.51 on Thursday.

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The merger valued Lotus Technology at around $7 billion, facilitated by L Catterton Asia Acquisition Corp (LCAA), a SPAC supported by L Catterton. Lotus Technology is a subsidiary of the iconic British sports car maker Lotus Group, jointly owned by Chinese automaker Geely and Malaysia's Etika Automotive.

Amid increased scrutiny of electric vehicle (EV) companies in capital markets, Lotus Technology's Nasdaq debut comes at a critical juncture. Earlier declines in the stock prices of EV manufacturers like Rivian Automotive and Lucid Group underscored concerns about the impact of slowing EV demand on growth projections.

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Headquartered in Wuhan, China, Lotus Technology collaborates with Geely to produce luxury lifestyle EVs under the esteemed Lotus brand, established in 1948. CEO Qingfeng Feng emphasized that accessing capital markets through the IPO will expedite Lotus's global expansion efforts.

Following the SPAC merger, over 90% of LCAA shareholders redeemed their shares, leaving approximately $11 million in the trust's account. This limited public float could contribute to increased stock volatility.

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Lotus Technology has introduced two EV models, including its first fully electric sports utility vehicle, Eletre, which commenced deliveries in China in 2023 and expanded to the UK and the European Union. The company anticipates entering the U.S. market later this year.

With $880 million in financing secured prior to the merger, Lotus Technology aims to establish a global luxury business, distinguishing itself from conventional EV manufacturers. Chinta Bhagat, Co-Chief Executive Officer of LCAA, expressed confidence in the partnership's ability to support Lotus's ambitious growth plans.

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(With Reuters inputs)
 

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Published February 24th, 2024 at 13:47 IST