ELVA Stock Rocketed 40% Today – What’s The Pact With Amazon?

• Electrovaya said Amazon chose its batteries for their clean safety record and cost-effectiveness, among other things.
• The company has issued warrants to Amazon, which become fully vested once Amazon’s total purchases reach a certain threshold.
• An undisclosed portion of the warrants becomes immediately exercisable upon initiation of the agreement.

Shares of Electrovaya (ELVA) skyrocketed on Wednesday after the company struck a commercial partnership with Amazon to supply batteries for its e-commerce business.

At the time of writing, ELVA stock surged 40% and is on track for its biggest one-day percentage jump ever, if session gains hold.

Amazon To Buy Electrovaya’s Batteries

As part of the agreement, the company will provide batteries to Amazon for its material-handling operations. Moreover, the partnership provides scope for the batteries to be used in Amazon’s robotics and energy storage systems.

Electrovaya said Amazon chose its batteries, which are used in applications including automotive, warehousing, and autonomous guided vehicles, for their clean safety record, low environmental impact, and cost-effectiveness when compared with other options on the market.

"Electrovaya's Infinity Battery Technology has demonstrated real performance in demanding material handling environments, and this agreement with Amazon reflects our confidence in the opportunity ahead, said CEO Raj DasGupta. “We look forward to building on that foundation in other industrial applications where safety and longevity are critical."

Contours Of The Agreement

Electrovaya will also issue Amazon warrants to purchase up to 13.9 million common shares as part of the latest agreement. The company said the warrants become fully vested once Amazon’s total purchases reach $280 million.

An undisclosed portion of the warrants becomes immediately exercisable upon initiation of the agreement, at an exercise price based on the 5-day volume-weighted average trading price immediately before the date of the agreement, the company said.

What Do Retail Traders Think About ELVA?

On Stocktwits, retail sentiment for ELVA turned ‘extremely bullish’ from ‘bearish’ over the last 24 hours.

One user on the platform said the Amazon deal might fuel the company's turnaround story.

Another user saw the surge in ELVA shares as an opportunity to exit their position.

ELVA stock has gained 34% so far this year and has nearly tripled in value over the last 12 months, outperforming the S&P 500.

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