Key Points
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Agility Robotics will soon become a publicly traded outfit.
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It’s not going through a traditional initial public offering, however, but rather through a special acquisition company for this very purpose.
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The effect and end result are still the same as any ordinary IPO, though, including all of their usual trappings.
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The era of humanoid robots isn’t on the distant horizon any longer. It’s almost upon us, and in some regards already here. Demonstrations of them are now common, and Tesla (NASDAQ: TSLA) co-founder and CEO Elon Musk still believes his company will be making 20,000 Optimus robots per week by the end of next year.
The opportunity is getting investment capital flowing, of course. The next chapter in this business’s overall funding? The debut of Agility Robotics’ stock sometime in November.
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Just don’t dive in as soon as you can. You’ll likely be able to get it at a lower price soon enough.
The SPAC route
This won’t be your typical IPO (initial public offering). Rather, privately owned Agility Robotics will go public by being absorbed into a special purpose acquisition company — or “SPAC” — called Churchill Capital XI (NASDAQ: CCXI), specifically created for this purpose and that’s already trading. Once that $620 million SPAC offering is completed (valuing Agility at $2.5 billion), its name and ticker will be changed to Agility Robotics and AGLT, respectively.
This is an easier way to become a publicly traded entity than a conventional IPO, in which a company must meet strict listing requirements before selling newly issued shares to investors.
Again, though, don’t feel as if you need to be first in line to invest.
Let someone else insist on being first at any price
Although the process is somewhat different, the underlying hype that usually surrounds new high-profile stocks is the same. That is, as we recently saw with Space Exploration Technologies (NASDAQ: SPCX) and Lycia Therapeutics (NASDAQ: LYCA), it doesn’t take long for the initial bullishness stemming from newness to fade, allowing young stocks to lose quite a bit of ground early on. Agility Robotics’ SPAC isn’t apt to be an exception.
Just don’t feel as if you need to avoid Agility Robotics forever. Although post-listing volatility could linger for years, the most harrowing action is often in the rearview mirror within a few weeks, if not several days. Steering clear of this initial action is purely a practical matter meant to avoid fairly predictable profit-taking.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.