These violent delights have violent ends. Not too long ago, Lucid Group represented the pinnacle of the post-pandemic excesses, replete with a full-fledged SPAC mania. Now, the company appears on the verge of ending its very short stint as a public entity.
Over the past couple of weeks, we’ve continued to highlight Lucid Group’s persistent cash shortage. After all, the company is currently burning around $1 billion in cash every quarter.
Toward the end of last year, Lucid Group announced that it raised around $600 million via an at-the-market offering. However, in an unexpected show of largesse, the Ayar Third Investment Company, an affiliate of the Saudi PIF, participated in a private placement of shares, allowing Lucid Group an avenue to raise $915 million in additional funding.
2022 Lucid Air
$169K MSRP
Only 2,500 miles.
Didn’t even CLEAR $110K. pic.twitter.com/9mhMJEmfKy
— CarDealershipGuy (@GuyDealership) January 20, 2023
Despite this substantial cash-raising exercise, the aggressive price cuts instituted by Tesla and other automakers in recent weeks have placed Lucid Group in an unenviable position of shrinking margins and low sales. A few days back, the EV player revealed that it “produced 3,493 vehicles during Q4 at its manufacturing facility in Arizona and delivered 1,932 vehicles during the same period.” This means that around 1,561 EVs ended up in Lucid Group’s inventory during the quarter. Elevated inventory is usually not considered an indicator of healthy demand. Moreover, as illustrated in the tweet above, used Lucid Air EVs are now being sold at steep discounts. Of course, this is understandable given the fact that the broader used auto market has cracked in the US. Even so, these figures are horrendous by any definition.
Is the Saudi PIF Taking Lucid Group Private?
$LCID anyone else notice that the Betaville editor didnt tweet anything about Lucid?
Literally has no connection to lucid motors or the saudi pif
Just saying pic.twitter.com/JTU6yVPmqO
— (@SPACpicks) January 28, 2023
This brings us to the crux of the matter. Over the past few days, rumors have continued to swirl that the Saudi PIF is about to take Lucid Group private. Bear in mind that the Saudi sovereign wealth fund is already Lucid’s biggest shareholder. Apparently, this rumor was initiated by Betaville. Interestingly, as illustrated in the tweet above, Betaville has so far eschewed tweeting this major scoop, indicating that this possible scenario might not be set in stone just yet.
قريبًا :
قد يستحوذ صندوق الإستثمارات العامة السعودي بشكل كامل على شركة السيارات الكهربائية ” لوسيد موتورز ” وفي حال إتمام الصفقة ستصبح #السعودية احدى اكبر دول العالم المُنتجة للمركبات الكهربائية pic.twitter.com/54mpQPDMNz
— قريباً في السعودية (@KSAsoon1) January 28, 2023
Moreover, this speculation is now being picked up by a number of Saudi publications.
Lucid jumps amid Saudi Arabia fund takeover speculation $LCID
— Ryan Rozbiani (@RyanRozbiani) January 27, 2023
Lucid Group shares jumped 43 percent on Friday on the back of this chatter. Given that the stock currently has a short interest of 25.49 percent, unless a firm negation materializes soon, Lucid Group shares are likely to enter a painful short squeeze going forward. Reddit forums are already pouncing on this opportunity.
If the Saudi PIF does unveil a firm plan to take Lucid Group private, much would depend on the tender offer share price. After all, many investors purchased the stock at elevated prices during the SPAC heydays. If the tender offer is at a material discount to the cost basis of such investors, it would most likely open up a pandora’s box of lawsuits. Stay tuned!
The post As the Chatter Grows Around the Saudi PIF Supposedly Taking Lucid Group Private, Prepare for a Short Squeeze and Lawsuits Galore by Rohail Saleem appeared first on Wccftech.
