Shares of Auto Technology Company Spike on New Agreement

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Monday, September 16, 2024

Shares of this automotive technology company's new collaboration, along with definitive agreements with certain investors, are soaring during Monday trading.

Automotive technology company REE Automotive (NASDAQ: REE) provides full-by-wire electric trucks and platforms. The company announced in a press release today a strategic agreement with Motherson Group, where Motherson will manage the sourcing and supply chain of all production parts and support the assembly of the REEcorner® and REE P7 electric trucks, the first full-by-wire, software-driven certified medium-duty electric trucks available on the market today. Motherson will also nominate a director to join REE’s board of directors.

Motherson Group is an engineering and manufacturing specialist and a major supplier to the automotive industry. It has long-standing relationships with global OEMs such as Mercedes Benz, Audi, Volkswagen, Suzuki, BMW, Porsche, GM, Ford, Stellantis, Daimler Trucks, Paccar and John Deere. 

REE also announced that it has entered into definitive agreements with certain investors. These include  M&G Investments, Motherson, and Varana Capital, for the purchase and sale of 11,001,941 shares of its Class A ordinary shares (or pre-funded warrants in lieu thereof) at a purchase price of $4.122 per share in a registered direct offering, for gross proceeds of $45.35 million before deducting applicable fees and expenses. 

REE intends to use the proceeds for general working capital. Subject to the satisfaction of customary closing conditions, the offering is expected to close on or by September 19, 2024.

Shares of REE spiked in morning trade, up over 28 percent.

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