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 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.
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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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Churchill Capital Corp IV extends 2-day surge to over 50% on news of plans to take Lucid Motors public via SPAC

Electric vehicle charging.
Electric vehicle charging.

  • Shares of Churchill Capital Corp. IV are up over 50% in a two-day streak to start the week.
  • News of the SPAC potentially taking EV company Lucid Motors public is driving the share price higher.
  • The fourth of seven ‘blank-check’ companies operated by Michael Klein, Churchill Capital Corp. IV’s plan for Lucid Motors would keep the SPAC craze going in 2021.
  • Sign up here our daily newsletter, 10 Things Before the Opening Bell.

Shares of Churchill Capital Corp IV soared to start the week on news the special purpose acquisition company is in talks to take Lucid Motors public, per Bloomberg.

Churchill Capital Corp IV is operated by veteran Wall Street dealmaker Michael Klein, and is the fourth of seven ‘blank-check’ companies which Klein has been using to take partner companies public.

In this case, the partner firm is Lucid Motors, a relatively well-established EV manufacturer based out of Newark, California, and which targets the luxury end of the car market. The deal could potentially value Lucid at $15 billion, according to Bloomberg. 

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Lucid is yet another competitor in an increasingly crowded EV space. However, the company has a little more going for them than many of its competitors.

Lucid boasts world-class EV tech and is owned in part by the Public Investment Fund of Saudi Arabia after a 2019 funding round valued at over $1 billion.

In the past year, the news around Lucid heated up significantly, especially after the company’s September announcement of their first full-sized EV, the Air.

Starting at $77,400 ,the Air features a 9.9 second quarter-mile and fast-charging that captures 300 miles of new EV range in just 20 minutes.

Shares of Churchill Capital Corp IV are trading close to $15 after hovering around the $10 mark for months. The SPAC was the third most traded name among Fidelity customers as of Tuesday morning, behind EV makers Nio and Tesla, according to data from Fidelity.

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