What happened
Shares of special purpose acquisition company Tortoise Acquisition (NYSE: SHLL) were trading higher on Wednesday as intense investor interest in the company's pending deal to merge with electric heavy-truck start-up Hyliion continued to drive gains.
As of 2:45 p.m. EDT, Tortoise's shares were up about 8.7% from Tuesday's closing price.
So what
Tortoise is a special purpose acquisition company (SPAC), meaning a company that has no business plans of its own but that seeks to acquire other businesses. (Put another way, it's a shell company, which explains its cheeky name and ticker symbol.)
Last month, Tortoise announced plans to merge with Hyliion, a maker of hybrid and electric drivetrains for heavy trucks, in a deal similar to the one that took rival electric-truck start-up Nikola (NASDAQ: NKLA) public in early June. In a nutshell, Tortoise and Hyliion will merge, some outside investors will add additional funds, the merged company will be named Hyliion, and Tortoise's former shares will continue to trade under the new ticker HYLN.
Hyliion makes hybrid (and soon, electric) drivetrains for Class 8 trucks. It's expected to merge with Tortoise later this quarter. Image source: Hyliion.
Hyliion and Nikola are aiming at the same market segment, so-called Class 8 heavy tractor-trailer trucks, but their business plans are different. While Nikola plans to manufacture its own trucks in Arizona, Hyliion has partnered with established auto-industry suppliers who will manufacture and ship its hybrid and electric drivetrains directly to truck manufacturers for installation.
Nikola's shares were surging on Wednesday after an analyst upgrade renewed transportation investors' interest in the sector. That's probably why Tortoise's shares are up today as well.
Now what
Investors can look forward to Tortoise's second-quarter earnings report for an update on the merger deal and details about the financial state of the company. That's likely to happen in early August.
The real news, though, will be made when Tortoise and Hyliion release more information on their investors, financial condition, and business plans. That will happen as we get closer to the merger date, expected by the end of September.
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