425: Stardust Power Eyes Nasdaq Listing in June Following $490 Million SPAC Deal

Lithium refiner Stardust Power anticipates commencing trading on the Nasdaq in June after finalizing a $490 million SPAC merger with Global Partner Acquisition Corp II.

Summary

• Stardust Power, a lithium refining company, is expected to go public on the Nasdaq in June through a $490 million SPAC deal with Global Partner Acquisition Corp II (GPAC).
• The company is constructing a lithium refinery in Oklahoma with a planned production capacity of up to 50,000 metric tons of battery-grade lithium annually from American brine sources.
• Stardust Power is also developing upstream lithium supply lines to become vertically integrated, including a potential interest in Usha Resources' Jackpot Lake lithium brine project and assessment of QXR's Liberty lithium brine project.
• The company anticipates benefiting from the increasing demand for lithium driven by the growth of the electric vehicle (EV) market and government initiatives to bolster domestic supply chains.
• The business combination is subject to risks and uncertainties, including regulatory approvals, shareholder approvals, and the ability to maintain the Nasdaq listing.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook for Stardust Power, highlighting its upcoming Nasdaq listing and growth plans. However, it also acknowledges the risks associated with the SPAC deal and the lithium market, preventing a higher sentiment score.

Positives

• Stardust Power is positioned to benefit from the increasing demand for lithium due to the growth of the EV market.
• The company's Oklahoma refinery aims to provide a domestic source of battery-grade lithium, reducing reliance on foreign suppliers.
• Strategic partnerships with Usha Resources and QX Resources could secure valuable lithium supply lines.
• The company's CEO is optimistic about lithium prices rising due to destocking by Chinese processors.
• The company is developing a lithium refinery in Oklahoma that is expected to be able to produce up to 50,000 metric tons of battery-grade lithium from American brine sources.

Negatives

• Lithium prices have declined from their 2022 highs due to tempered expectations for the EV industry.
• Major automakers have reduced their EV production forecasts due to consumer concerns about cost, range, and charging time.
• The SPAC deal is subject to various risks and uncertainties, including regulatory and shareholder approvals.
• The company faces competition from established lithium refiners, particularly in China.
• The company may be unable to raise additional funds through a private placement or equity or debt raise by prior to or in connection with Closing.

Risks

• The business combination may not be completed in a timely manner or at all.
• The company may not obtain the necessary shareholder and regulatory approvals.
• The announcement of the deal could negatively impact Stardust Power's business relationships and employee retention.
• Legal proceedings could be instituted against GPAC II or Stardust Power.
• The company may face challenges in maintaining its Nasdaq listing.
• The anticipated growth of the lithium industry may not be achieved.
• The company may be unable to raise additional funds through a private placement or equity or debt raise by prior to or in connection with Closing.

Future Outlook

Stardust Power anticipates completing its SPAC merger and listing on the Nasdaq in June, with plans to expand its lithium refining capacity and secure upstream supply lines to capitalize on the growing EV market.

Management Comments

• Roshan Pujari, Co-Founder and CEO of Stardust Power, expects the SPAC deal to close and the new listing to be effective in June.
• Pujari remains bullish on EV growth, citing state regulations phasing out internal combustion engine vehicles.
• Pujari is cautiously optimistic about lithium prices rising as Chinese processors destock.
• Pujari emphasizes the importance of manufacturing battery-grade lithium outside of China.

Industry Context

The announcement comes amid tempered expectations for the EV industry and fluctuating lithium prices, but Stardust Power aims to capitalize on the long-term growth potential of the EV market and the need for diversified lithium supply chains outside of China. The company's strategy aligns with the Biden administration's efforts to bolster domestic supply chains for critical minerals.

Comparison to Industry Standards

• The 50,000 metric ton capacity of Stardust Power's planned refinery would position it as a significant player in the North American lithium refining market, potentially competing with established players like Albemarle and Livent.
• The company's focus on domestic brine sources aligns with the trend of securing local and sustainable lithium supplies, similar to projects being developed by Standard Lithium and EnergySource.
• The vertical integration strategy, including potential deals with Usha Resources and QX Resources, mirrors the approach of companies like Lithium Americas, which are developing both lithium mining and processing capabilities.

Stakeholder Impact

• Shareholders of GPAC II will vote on the proposed business combination.
• Employees of Stardust Power may be affected by the deal, with potential risks to retention.
• Customers in the EV battery industry could benefit from a new domestic source of lithium.
• Suppliers of lithium brine may see increased demand from Stardust Power's refinery.
• Creditors of GPAC II and Stardust Power will be impacted by the financial terms of the merger.

Next Steps

• Finalize the SPAC merger with Global Partner Acquisition Corp II.
• Complete the Nasdaq listing under the ticker symbol SDST.
• Continue construction of the lithium refinery in Oklahoma.
• Secure lithium supply lines through partnerships with Usha Resources and QX Resources.
• Obtain necessary shareholder and regulatory approvals.

Key Dates