Most stocks with exposure to batteries, energy storage, or renewables have taken off this year. This is partly due to industry fundamentals – electric transport is growing like crazy – but it’s also influenced by the Tesla (TSLA) effect. Any stock that looks like Tesla has become a retail investor darling with hopes of getting rich quick.
That said, there are some companies that remain attractive opportunities and have yet to have future growth priced in. Eos Energy Enterprises (EOSE) is one of those companies. While it’s already run up 35% from its SPAC launch to $13.50 per share, it remains attractive through $15-20 in the short term. Traded warrants (NASDAQ:EOSEW) provide an opportunity for enhanced return via increased risk exposure.
Eos recently went public via a SPAC acquisition. B. Riley Principal Merger Corp. II (BMRG) acquired EOS for $176 million and a pro-forma market capitalization of approximately $500 million. Each unit of BMRG represented 1 share in the newly formed company and one half of a warrant, which are trading under the tickers EOSE and EOSEW, respectively.
Company Overview
Eos Energy Enterprises is a battery manufacturer. It has developed an alternative chemistry to the well-known and widely used Li-ion battery. Li-ion batteries have lots of advantages, which is why they have taken off everywhere from mobile phones and laptops to electric vehicles. Among commercially viable options, Li-ion batteries are currently the most energy dense, measured in kWh/kg or kWh/m3, which makes them especially suited for any application where portability is the priority. When it comes to transport, they can’t be beaten. In fact, much of Tesla’s capital investments have been to increase Li-ion battery capacity to support its growing vehicle fleet.
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