Lucid is raising $3.0 billion through stock offering

on Jun 1, 2023
  • Lucid will sell about $1.8 billion worth of shares to Saudi Arabia's PIF.
  • Analyst Joel Levington explains what it means for the EV company.
  • Lucid shares are now down 50% versus their year-to-date high.

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Shares of Lucid Group Inc (NASDAQ: LCID) tanked more than 15% this morning after the EV maker announced plans of raising $3.0 billion via a new equity offering.

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PIF is buying more of Lucid shares

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On Thursday, the electric vehicles company said it will sell about $1.8 billion worth of shares to Saudi Arabia’s Public Invest Fund.

PIF currently owns just over 60% of the Nasdaq-listed firm – and the funding round that Lucid announced today will not increase its stake any further.

The news arrives about a month after Lucid Group reported a disappointing first quarter as Invezz reported here. The management also said that the company will produce over 10,000 vehicles this year versus 10,000 to 14,000 they had guided for in February.

Following the sell-off today, Lucid shares are down 50% versus their year-to-date high.

Analyst’s take on the news

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The remaining $1.2 billion will be raised through a public offering at $6.91 a share, as per the press release. Lucid Group intends to use the new money for capital expenditures and other general corporate purposes.

Assuming the rate at which it’s burning cash at the moment, the EV company now has enough capital to last until mid-2025. According to Joel Levington of Bloomberg Intelligence:

The offering, at least temporarily, undermines hope for a full privatisation. Additional funds may solve financial flexibility issues in the near term. But Lucid may need additional support in 2024.

Bank of American Securities is acting as book-running manager for the equity offering. Wall Street currently has a consensus “overweight” rating on Lucid shares.  

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