Point72 Asset Management leader Steven Cohen (Trades, Portfolio) disclosed a stake in Growth Capital Acquisition Corp. (GCAC, Financial) earlier this week.
To generate superior risk-adjusted returns, the billionaire guru's Stamford, Connecticut-based firm invests in a wide range of asset classes worldwide. Its long-short strategy is based on bottom-up research processes that focus on fundamentals and macroeconomic conditions.
According to GuruFocus Real-Time Picks, a Premium feature, Cohen invested in 1.08 million shares of the New York-based special purpose acquisition company on Sept. 10, allocating 0.05% of the equity portfolio to the position. The stock traded for an average price of $9.93 per share on the day of the transaction.
The SPAC, which operates as a shell company while in pursuit of a combination with another business, has a $213.53 million market cap; its shares were trading around $9.90 on Tuesday with a price-earnings ratio of 96.15 and a price-book ratio of 1.3.
Since its initial public offering in March, the stock has gained nearly 4%.
On Aug. 5, Growth Capital announced it entered a merger agreement with Cepton Technologies Inc.
The San Jose, California-based company, which was founded in 2016, provides light detection and ranging-based (lidar) solutions for the automotive, smart cities, smart spaces and smart industrial applications markets.
One of the most innovative and rapidly growing sectors, lidar is a remote sensing method that uses light in the form of a pulsed laser to measure ranges. Cepton is looking to implement the technology for standard safety use in advanced driver assistance systems in mass-market passenger vehicles. The company’s founder and CEO, Dr. Jun Pei, along with co-founder and Chief Technology Officer Dr. Mark McCord believe it could be instrumental in reducing traffic collisions, eliminate the human and financial toll of avoidable vehicle and pedestrian accidents and enable safe autonomous driving.
In a statement, Pei noted that the combination is “another step in making that vision a reality.”
“Our merger with Growth Capital is a tremendous milestone for Cepton because it enables us to accelerate our investment in state-of-the-art lidar solutions and manufacturing partnerships that are expected to make the next generation of road safety accessible to mass-market consumer vehicles, not just luxury vehicles,” he said. “We anticipate that people will be able to purchase vehicles with advanced driver assist features powered by Cepton’s lidar technology by 2023.”
According to the terms of the agreement, Cepton shareholders will receive newly issued shares of Growth Capital stock, which will be determined using an enterprise value of $1.5 billion on a cash-free, debt-free basis.
Upon the deal’s close, which is projected to occur in the fourth quarter, the combined company will be renamed Cepton Inc. and trade under the ticker “CPTN.” It is expected to have an equity value of $1.8 billion.
GuruFocus rated Growth Capital’s financial strength 8 out of 10 and its profitability scored a 2 out of 10 rating.
Cohen is currently the only guru invested in the stock with 5.01% of its outstanding shares.
Portfolio composition
Cohen's $22.26 billion equity portfolio, which was composed of 941 stocks as of the three months ended June 30, is most heavily invested in the technology, health care and consumer cyclical sectors.
As of the end of the second quarter, the guru’s five largest holdings were Amazon.com Inc. (AMZN, Financial), Salesforce.com Inc. (CRM, Financial), Uber Technologies Inc. (UBER, Financial), Western Digital Corp. (WDC, Financial) and Visa Inc. (V, Financial).
