By Echo Wang and Lance Tupper
NEW YORK (Reuters) -Shares of Lotus Technology closed up 2% in their Nasdaq debut on Friday, recouping earlier losses, after the luxury electric car maker completed its merger with a blank-check acquisition company backed by private equity firm L Catterton.
The American Depositary Shares, which began trading with the new ticker "LOT", ended at $13.80 after falling as low as $10.12. About 190,000 shares traded. The special purpose acquisition company (SPAC) closed at $13.51 on Thursday.
Lotus Technology was valued at about $7 billion in the deal with L Catterton Asia Acquisition Corp (LCAA), the SPAC backed by L Catterton. It is part of British sports car maker Lotus Group which in turn is owned jointly by Chinese automaker Geely and Malaysia's Etika Automotive.
The listing came at a time when EV makers are facing scrutiny in capital markets. Rivian (NASDAQ:RIVN) Automotive and Lucid Group (NASDAQ:LCID) tumbled on Thursday after their earning reports pointed to the impact of slowing EV demand on their ramp-up plans.
Lotus Technology is headquartered in the central Chinese city of Wuhan and produces cars through a partnership with Geely. It designs, develops and sells luxury lifestyle EVs under the British brand Lotus founded in 1948.
"At this point in time, being able to access capital market through the IPO... is an acceleration for Lotus to expand globally," said Qingfeng Feng, chief executive officer of Lotus Tech.
Similar to other SPAC mergers, over 90% of LCAA shareholders redeemed their shares, leaving the trust's account with roughly $11 million. Typically, a stock is prone to volatility if only a small amount of shares are publicly available.
Lotus Technology has launched two EV models, including its first fully electric sports utility vehicle, Eletre. The model started delivery in China in 2023 and followed in the UK and the European Union, the company said. It is expecting to deliver cars in the U.S. later this year.
The company secured $880 million in financing ahead of its merger with LCAA.
"We saw what these guys were trying to do to it, essentially building a global luxury business, which is very different from just a typical EV company. And so we thought that our partnership would be able to help them do that well," said Chinta Bhagat, Co-Chief Executive Officer of LCAA.