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August 30, 2020

AI Company Making A $3.4 Billion Merger

Frank Cabibi

Gores Metropoulos Inc. (NASDAQ: GMHI) has marked a deal with global leader in artificial intelligence on highway autonomy, Luminar, and is going public on this merger worth over $3 billion.

A little about Luminar Tech

Luminar works in the field of highway safety using various AI tools for detection of objects up close or even from a considerable distance. One of their products, the Iris, can detect objects from a max distance of 500 meters away.

https://www.luminartech.com/

Just from clicking on the website, you can get an idea of the kind of technology that Luminar is working with without the use of many words. The front page is an interactive picture of a city street that the users can look around with. Immediately, the site can not only grab the users attention, but expose the advanced technology without explaining it in depth.

The company is well-established in the private sector with 50 partnerships including several of the top Original Equipment Manufactures in the world.

GMHI

Gore's most recent earnings report came as a surprise to a lot of investors in a good way. On top of that, the size of this merger is a little bigger than Nikola's merger with VTIQ earlier this summer. This might be a good sign to traders now that the market cap sits at a little over $1 billion. The new valuation of $3.4 billion might drive the price up. Luminar will receive an immediate $170 million in finance as the ticker will change from GMHI to LAZR on the Nasdaq. The deal is expected to close at some point in the 4th quarter.

GMHI on the 1D chart. For those who are trying to trade this pre-merger, support can be found in the 10.70-80s price range. Price hasn't been able to break above the $12 mark yet, so a potential retest could happen come merging time. 14-Day RSI stands little under 60.

I am currently holding a position on this stock, however it is small. Remember that anything can happen in these unpredictable markets, especially the SPACs, so it's important to keep a level head and risk what you are willing to risk.


Disclaimer:

Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

Featured Pic: https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.spar3d.com%2Fnews%2Flidar%2Fluminar-lidar-starts-production-scale%2F&psig=AOvVaw0jaPPo4zhsonE67L7aDxZ4&ust=1598902576854000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCMi0l7rWw-sCFQAAAAAdAAAAABAD

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