Stock of electric motorcycle brand Livewire increases after merger

Harley Davidson electric motorcycle subsidiary Livewire saw its shares jump 24% today after news of a merger with AEA-Bridges Impact Corp.

Harley Davidson (NYSE:HOG) launched its Livewire (NYSE:LVWR) brand in 2014 by unveiling a prototype electric motorcycle. Since then, the company sold the Livewire motorcycle under the Harley Davidson brand, but has since split the motorcycle into its own brand. Livewire was listed on the NYSE and has now merged with a special purpose acquisition company (SPAC), AEA-Bridges Impact Corp (NYSE: IMPX.U).

With SPAC’s investment, not only did the stock jump 24%, but Livewire received a valuation of $1.77 billion, according to the SPAC website. Looking further into SPAC, their investment focus is broad as they seek to invest in “sustainable businesses”, which has attracted SPAC to invest.

“We are at the confluence of two fundamental changes impacting the industry – vehicle electrification and sustainability…,” says John Garcia, President and Co-CEO of AEA-Bridges Impact Corp, “LiveWire is well positioned to become the first sustainable electric motorcycle brand and redefine the industry by leveraging the manufacturing and distribution expertise of Harley-Davidson and KYMCO.We are thrilled to partner with Harley-Davidson and the team. LiveWire to help define the future of electric motorcycles as the industry continues its rapid transformation.

Press releases from Harley, AEA Bridges Impact and Livewire did not indicate plans for the brand. Still, at the very least (as noted by the SPAC presidents), they are well positioned by being reasonably early in the electric motorcycle market.

So far, Harley is one of the few select manufacturers in the electric motorcycle market. Zero Motorcycles and Enercia are examples of startups in the space, but larger names such as Yamaha, KTM, BMW or Kawasaki have remained absent. Honda, the world’s largest motorcycle manufacturer, recently announced plans to offer electric motorcycle options worldwide, but they have yet to materialize.

The biggest challenge facing Livewire is price. Hopefully, with continued investments like today’s, the brand will be able to make electric motorcycles more competitive against their gas-powered counterparts.

Disclosure: William is not invested in any company related to the Livewire merger.

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