Lucid
‘s largest shareholder is showing growing support for its electric vehicle investment.
The Saudi Public Investment Fund, or PIF, bought 265,693,703 shares of
Lucid
(ticker: LCID) stock in a private placement of common stock for an average price of $6.83 a share. It’s a huge $1.8 billion purchase representing almost 15% of the total stock outstanding, before the issuance.
It now owns about 65% of the common stock outstanding, up from about 60% before the purchase. PIF didn’t immediately return a request for comment about the purchase.
The purchase was made on June 22. Shares closed that day at $5.73 apiece. Shares rose 1.5% Monday while the
Nasdaq Composite
fell 1.2% after the company announced a partnership with
Aston Martin
(AML.London). Aston will buy products from Lucid and Lucid got cash and stock in return.
Lucid shares are up another 3.1% in after-hours trading Monday following the disclosure of the purchase.
Investors, apparently, believe more capital is a positive for the company even if existing shareholders own a little less of the company after the offering. Capital is important as Lucid ramps sales. Wall Street sees the company using about $10 billion over the coming four years before Lucid generates free cash flow after achieving about $13 billion in annual sales. Analysts project 2023 sales of about $1 billion.
It’s a lot of growth and a lot of cash. Higher interest rates and more EV competition have sapped some investor enthusiasm for start-up EV stocks. Lucid shares are down about 71% over the past 12 months.
Write to Al Root at allen.root@dowjones.com
Read the full article here