Churchill Capital Corp. IV retail investors stung by the steep drop following the Lucid Motors deal are banding together on Reddit to ‘defend’ the stock

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Reddit logo.

A group of Churchill Capital Corp. IV retail investors hurt by the stock’s rapid fall are attempting to band together on Reddit to “defend” it from short sellers. 

The stock fell sharply in the days following Monday’s announcement that the SPAC would merge with luxury electric-vehicle maker Lucid Motors. 

A user going by u/MadMax212121, took to Reddit’s r/CCIV forum on Thursday to discuss what the trader described as “market manipulators” entering the stock.

In a post entitled, “LWSB: Lucid Wall Street Bets, all longs – CCIV heavily shorted by coordinated groups and manipulators. Why can’t we have a LWSB and defend. Are you in?” that garnered nearly 9,000 upvotes, the Redditor said retail traders should “keep buying” CCIV stock until it hits $300 per share.

The post echoed popular “David vs. Goliath” sentiments from past Wall Street Bets discussions arguing traders should join forces to “defend” CCIV from institutional short-sellers and bearish options traders. The post called CCIV a “heavily-shorted” stock.

However, according to data from The Wall Street Journal, short interest in CCIV was just 2.19% in February. Although the figure has risen over the past week. By comparison, Reddit darling GameStop has short interest of around 30%. 

With a lower short interest, it’s unlikely a short squeeze could occur, meaning that a GameStop-style rally in the share price is a long shot. Not only that, but hedge funds also own a considerable portion of CCIV shares.

In fact, the three top hedge fund owners of CCIV – Millennium Management, Karpus Management, and Alberta Investment Management – own over $400 million worth of shares in the SPAC, and institutional ownership in the company is over 55%, according to data from Nasdaq.

That didn’t stop Redditors from making their case.

“It takes time to build momentum. GME did not happen in one day. Be Patience. Shorts/puts will try to spoil momentum, but we together hold strong and move step by step. we will start first day war tomorrow. Sleep well Warriors,” u/MadMax212121 said.

Additionally, the traders have started their own forum dedicated specifically to Lucid Motors. It’s called Lucid Wall Street Bets or r/LWSB and currently has around 5,000 members.

While that’s a far cry from the nearly 10 million users on the main Wall Street Bets forum, the Lucid traders are gaining momentum.

Attempts to crowdsource funding to “defend” certain stocks from falling share prices has become a common occurrence on Reddit. It’s a phenomenon that has come despite the Securities and Exchange Commission saying they are looking into possible misinformation on social media sites like Reddit.

Shares of CCIV recovered as much as 17% on Friday before paring gains. 

CCIV chart 2

 

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Churchill Capital Corp. IV has plunged over 50% since announcing long-awaited Lucid Motors deal

Lucid Air.
Lucid Air.

Churchill Capital Corp. IV has plunged over 50% in a two-day skid since announcing the long-awaited Lucid Motors deal on Monday. 

For months, investors bought the stock on rumors of a deal, sending the share price surging, only to sell off sharply once news broke that the Michael Klein-backed SPAC would merge with the luxury EV maker.

The Newark, California-based Lucid Motors combined with Churchill Capital Corp. IV at a transaction equity value of $11.75 billion and a pro-forma equity value of $24 billion.

The transaction included a cash contribution from CCIV of $2.1 billion, and a PIPE investment of $2.5 billion, as well as a lock-up provision that “binds holders well beyond closing.”

Shares of the SPAC Churchill Capital Corp. IV originally soared roughly 600% after a Jan. 11 report from Bloomberg said the company was in talks to take the EV maker public.

Investors flocked to the blank-check firm amid a run on electric vehicles stocks, which are set to benefit from a “Biden Administration and Blue Senate green tidal wave,” according to analyst Dan Ives of Wedbush Securities.

Lucid’s efficient battery tech that CEO Peter Rawlinson has said is “more advanced technology than Tesla” also drew in investors, despite valuation concerns for the company that has yet to produce revenues from operations.

The Lucid Air sedan also undoubtedly attracted attention to the EV manufacturer. The company’s first EV is aimed at the Tesla Model S and boasts a 9.9-second quarter-mile timesuper fast charging, and a 517-mile range

With prices starting at $77,400 ($69,900 after the US federal tax credits) Lucid is setting its sights on the luxury end of the elecric car market. The company is starting sales with its luxury models including the Air Dream Edition.

Peter Rawlinson told Yahoo Finance in October of last year that he thinks “it’s really important that we start at a high-end position as a true luxury brand.”

“I’m a great believer that the first product defines the brand in the way the Tesla model S defined Tesla as a brand,” the CEO said.

After the Dream Edition rollout, Lucid expects to release its Gravity performance SUV by 2023. Helping the company do just that is a state-of-the-art Casa Grande, Arizona EV factory that will eventually produce roughly 365,000 vehicles annually.

Shares of CCIV fell nearly 20% on Wednesday, dropping under the $30 per share mark for the first time since February 4.

CCIV chart.
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Churchill Capital Corp IV plunges 45% after Lucid Motors strikes SPAC deal to go public with a $24 billion valuation

Lucid studios_5
Lucid Air.

  • Churchill Capital IV fell as much as 45% on Tuesday after Lucid Motors struck a deal to go public via the SPAC.
  • The deal will generate $4.4 billion for Lucid, which plans to use the funds to expand its Arizona facility.
  • Churchill’s transaction values Lucid at about $24 billion at the PIPE offer price of $15.00 per share.
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Shares in Churchill Capital IV fell as much as 45% in regular trading on Tuesday after the blank-check company’s merger with Lucid Motors was announced. 

Electric-vehicle maker Lucid confirmed it would go public via the special-purpose acquisition company run by financier Michael Klein with a pro-forma equity value of $24 billion. 

The deal will generate about $4.4 billion in cash for 14-year-old Lucid, which plans to use the funds to expand its manufacturing facility in Arizona. The facility has a production capacity of 365,000 units per year at scale.

Churchill’s latest stock performance is a reversal from previous sessions when reports on the deal sparked consecutive rallies.

Speculation over the deal has been going around for over a month. Earlier in February, shares in Churchill Capital IV soared 33% on a report the SPAC was nearing an agreement. On Monday, shares spiked 19% after Bloomberg said a deal could be announced Tuesday.

Lucid’s deal with Churchill, which is expected to close in the second quarter of this year, marks one of the highest-profile SPAC arrangements in the EV space after a wave of interest in electric-vehicle startups and automotive tech suppliers. That may have been sparked by a rally in Tesla’s shares over the past 12 months. Peter Rawlinson, the company’s CEO and CTO, is known for his work as chief engineer at Tesla for the Model S. He joined Lucid in 2013.

“I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory,” Rawlinson told Bloomberg in an interview. “This is a technology race. Tesla gets this. It’s why they are so valuable and Lucid also has the technology.”

The SPAC merger represents the largest capital boost since Saudi Arabia’s sovereign wealth fund injected an investment worth more than $1 billion in 2018. The deal was led by the Public Investment Fund as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management, and Winslow Capital Management.

Shares in Churchill fell as much as 35% in pre-market trading to $37.34 per share, after closing at $57.37 per share on Monday. 

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Churchill Capital Corp. IV spikes 19% as report tells investors to expect Lucid Motors deal as soon as Tuesday

Lucid studios_1
Lucid Air.

  • Reports out of Bloomberg indicate the Churchill Capital IV-Lucid merger investors have been waiting for may come as soon as Tuesday.
  • Churchill Capital Corp. IV has soared more than 425% since rumors of a merger were first reported.
  • Electric vehicle-maker Lucid Motors expects to sell its first Air Dream Edition in the second quarter of 2021.
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Shares of Churchill Capital Corp. IV spiked 19% on Monday after a Bloomberg report said a merger with the electric vehicle-maker Lucid Motors could come as soon as Tuesday.

Rumors about a potential merger between the so-called blank-check special purpose acquisition company (SPAC) Churchill Capital IV and Lucid have been in the works for over a month now.

If the deal goes through, it will use $2 billion in cash raised by Churchill Capital IV’s IPO, as well as an investment of between $1 billion and $1.5 billion from institutional investors to support the transaction.

When the merger is complete the combined entity will be valued at roughly $15 billion, according to unnamed sources at Bloomberg.

Churchill Capital IV’s stock has skyrocketed more than 425% since reports first came out of talks between the Michael Klein-backed SPAC and Lucid Motors last month.

Investors are excited about the prospects of Newark-based Lucid Motors. Lucid is a real competitor to Tesla, and its new all-electric vehicle, the Lucid Air has been praised by critics.

The company’s flagship model, the Air Dream Edition, is set to launch in the second half of 2021 and boasts a Tesla-like performance with a new focus on luxury.

Lucid is backed by Saudi Arabia’s sovereign wealth fund, also known as the Public Investment Fund or PIF, which acquired a 67% stake in the EV maker for about $1.3 billion in 2018.

Bloomberg reported earlier this month that Lucid was in talks to build an EV manufacturing facility near the Red Sea city of Jeddah as a result of its Saudi Arabian backing.

The company also completed its first factory in Casa Grande, Arizona in December, where it expects to eventually produce 400,000 cars annually.

If the Lucid merger with Churchill Capital Corp IV does go through, it will continue a year of monumental growth for SPACs. SPACs have overshadowed traditional IPOs in 2021, accounting for 63% of the nearly $77 billion raised on U.S. exchanges, according to data from Bloomberg.

Even Churchill Capital Corp IV is just one of seven SPACs backed by former Citigroup man Michael Klein. Just last week Klein raised $1.6 billion for his sixth and seventh SPACs.

Churchill Capital Corp IV traded up 17%, at $62.03, at 9:38 a.m. ET in New York.

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Churchill Capital IV soars 33% after report says the SPAC is nearing a deal to take EV maker Lucid Motors public

Lucid Air exterior_7
Lucid Air.

  • Churchill Capital Corp IV is reportedly in talks with Lucid Motors to take the company public.
  • The SPAC has seen its share price jump over 300% since rumors of the merger first became public on Jan 11.
  • If the merger goes through, Lucid will be one of the over 130 companies to go public via SPAC this year.
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Churchill Capital Corp IV soared as much as 33% on Tuesday after a report from Reuters suggested the company is close to a deal to take electrive vehicle maker Lucid Motors public at a valuation of around $12 billion.

The Michael Klein-backed SPAC is reportedly in talks with investors to raise between $1 and $1.5 billion for the transaction by selling shares in a PIPE. These funds would be an additional boost to the $2 billion Churchill Capital IV raised from its IPO in July.

According to Reuters, Lucid and Michael Klein have agreed on key terms of the deal, which could be announced as early as this month.

Churchill Capital IV declined to comment on the deal, and Lucid Motors did not immediately respond to Reuters’ request for comment. Both companies did not immediately respond to Insider’s request for comment.

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If the deal goes through, it would be yet another successful SPAC merger for the former Citigroup executive Michael Klein who raised another $1.6 billion for his sixth and seventh SPACs on Monday.

Rumors of a potential deal between the Michael Klein SPAC Churchill Capital IV and Lucid started back on Jan. 11 when Bloomberg first reported the two companies were in talks for a potential merger.

Subsequently, shares of Churchill Capital have jumped more than 300% as investors continue to target any news in the red hot EV market.

Lucid Motors was founded in 2007 as a battery company called Atieva by former Tesla executive Bernard Tse and entrepreneur Sam Weng.

Since then, the company has transitioned to a full-fledged EV manufacturer that focuses on luxury offerings. Lucid’s first EV, the Lucid Air, will take aim at the Tesla Model S with its base price of $77,400, a 517 miles of range, and a 9.9-second quarter-mile time.

Lucid also boasts a Casa Grande, Arizona factory that will eventually produce 400,000 vehicles annually, according to the company. 

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Churchill’s move to merge with Lucid Motors follows a long line of new EV entrants to the public markets over the past few years.

From Chinese EV manufacturer Nio to the Ohio-based Lordstown Motors, EV makers are booming, and SPACs are often their method of choice for entering public markets. More than 130 companies have now gone public via a SPAC merger or buyout in 2021 in what some are calling a SPAC boom.

While some of these SPAC entries have paid off for investors, others haven’t been as fruitful.

Lucid rivals Nikola and Fisker both went public via mergers with SPACs in 2020, and while Fisker has posted strong gains, much of Nikola’s gains have been erased as EV entrants are facing increasing competition.

Still, shares of CCIV responded positively to the news, trading up 32.44%, at $52.95, as of 3:56PM ET on Tuesday.

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Churchill Capital IV rallies 13% amid new signs it’s seeking to acquire Lucid Motors from an investing consortium led by Venrock Associates

Lucid Air.
Lucid Air.

  • VC firm Venrock Associates and a consortium of investors proposed the sale of Lucid Motors to CCIV, according to a Bloomberg terminal update.
  • Lucid and Churchill Capital IV have been rumored to be in merger talks since January 11.
  • The news comes as Lucid plans on releasing its first production vehicle this spring.
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Churchill Capital IV’s (CCIV) stock rallied as much as 13% Friday amid new signs the company is seeking to acquire EV maker Lucid Motors from an investing consortium led by VC firm Venrock Associates.

According to a Bloomberg terminal news update, CCIV began talks with Venrock Associates and a group of Lucid investors on Thursday, but the financial terms of the potential deal haven’t yet been disclosed.

Venrock Associates is one of the oldest investors in Lucid. The VC firm first bought into the company back in 2009 in a $7 million Series B financing round when Lucid was still a small battery manufacturer called Atieva.

Now Venrock is looking to turn that relatively small investment into a much larger gain by selling its holdings to Michael Klein’s SPAC Churchill Capital IV.

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Rumors of a potential Lucid Motors sale or merger with CCIV have been circulating for some time.

On Jan 11, Bloomberg first reported Lucid Motors was in talks to go public via a merger with the special purpose acquisition company. The news caused a 50% rise in CCIV’s share price in just two days. Since then, the stock has appreciated over 240% as investors continue to value the SPAC as if a deal with Lucid is in the works.

Now investors may be getting what they’re looking for, as the most recent news is yet another sign that CCIV and Lucid will eventually merge.

Lucid Motors first gained attention in the media with the release of its luxury EV, the Lucid Air. Even the base model of the electric vehicle will offer a range of 406 miles and a 0-60 of 2.5 seconds. The company says it will start at $69,900 with the incorporation of federal tax credits as well.

Lucid also earned headlines recently after opening a production facility in Casa Grande, Arizona, where it plans on eventually manufacturing 400,000 vehicles per year.

Although for now, there will be limited production of the company’s flagship model, the Air Dream Edition, which starts at $169,000 and will offer 1,080 horsepower and a range of 517 miles.

Lucid plans on producing its first saleable cars out of the Casa Grande factory this spring.

Churchill Capital IV traded up about 13%, at $35.60 per share, as of 9:56AM E.T. on Friday.

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Churchill Capital Corp IV rockets 20% as rumors of Lucid Motors merger fuel sustained rally

Lucid Air.
Lucid Air presentation with CEO Peter Rawlinson.

  • Shares of Churchill Capital Corp IV jumped some 20% on Monday amid continued optimism for a merger with EV Lucid Motors.
  • Lucid is in talks with the Public Investment Fund of Saudi Arabia to create an EV factory in the country. 
  • The EV manufacturer also recently completed the construction of a 590-acre production facility in Arizona.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Churchill Capital Corp IV skyrocketed another 20% on Monday amid continued optimism surrounding a potential merger with Lucid Motors.

The news of Michael Klein’s SPAC potentially merging with EV manufacturer Lucid to take the company public caused shares of the blank-check company to jump some 167% in under three weeks.

Still, Churchill Capital IV has refused to either confirm or deny the reports.

“We do not generally comment on rumors and speculation and will not comment as to whether the Company is or is not pursuing a specific business opportunity other than saying, as noted, we are always evaluating a number of potential business combinations,” the company wrote in a statement on January 19.

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Despite the lack of certainty around the merger, hopes of a Lucid acquisition are pushing Churchill Capital Corp IV’s stock higher. And with The Financial Times reporting the EV manufacturer is in talks with the Public Investment Fund of Saudi Arabia to build an electric vehicle factory near the Red Sea city of Jeddah, shares of Churchill are on fire yet again.

The Financial Times spoke with the Saudi fund’s governor, Yasir Al-Rumayyan, who confirmed reports out of Bloomberg earlier this month that said Lucid was thinking of making a new factory in the kingdom.

The move by Lucid seems to be a logical step given the company’s history with the Saudia Arabian fund.  

Back in 2018, a cash-strapped Lucid took in a reported $1.3 billion from the Saudis to keep operations running, an investment that was conditional on Lucid developing a production factory in Saudi Arabia, per Bloomberg.

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The news of a new factory in Saudi Arabia comes on the back of Lucid’s December announcement of the completion of a 590-acre production facility in Casa Grande, Arizona.

The Arizona factory expects to deliver up to 30,000 units per year in its first years of operation. And in its final form, the manufacturing capacity will grow to 400,000 annually. 

If Churchill Capital Corp IV and Lucid do end up merging, the EV company would also draw in a hefty amount of cash from the SPAC to fund its operations going forward.

All of this news has investors jumping at the chance to buy a blank-check company that still may or may be the EV darling that can compete with Tesla.

Churchill Capital Corp IV shares traded around $26.79 per share on Monday at 9:31 am EST. The SPAC now boasts a market cap of $6.93 billion.

Read more: This actively-managed SPAC ETF amassed $60 million assets within a month of launching. Its founder breaks down how to pick blank-check firms – and shares 3 to watch in 2021

 

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