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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SPAC HighCape Capital soars 140% on deal to buy protein-sequencing firm Quantum-Si

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Traders work on the floor at the opening bell of the Dow Industrial Average at the New York Stock Exchange on March 18, 2020 in New York.


Shares of special purpose acquisition company HighCape Capital Management LLC exploded as much as 140% on Thursday after the company agreed to buy biotech firm Quantum-Si. 

Quantum-Si has created the world’s first semiconductor chip that can enable protein sequencing and analyze proteins in a digitized format.  

 “DNA sequencing changed medicine and research by revealing what could happen in the body; protein sequencing shows what is happening right now,” ” said Dr. Jonathan Rothberg, Founder of Quantum-Si in a press release.

The transaction was also supported by a $425 PIPE, or private investment in public equity, with participation from Foresite Capital Management, LLC, Eldridge, accounts advised by ARK Invest, Glenview Capital Management, LLC, and Redmile Group, LLC. 

The expected value of the combined company is $1.46 billion. It will trade on the NASDAQ under the ticker symbol “QSI.” 

Quantum Si’s end-to-end solution is on track to launch commercially in 2022 for research use, according to the press release. 

The SPAC merger follows over 130 other blank-check companies that have gone public in 2021 as mania for the funding model continues. For context, in 2020 it took until early October for 130 SPACs to make their debut, according to data from investment firm Accelerate.

In a Thursday CNBC interview, Dr. Rothberg said that it’s not just the SPAC format that’s propelling more biotech companies to receive funding, it’s the “sophistication of investors.” 

“Our PIPE investors understood proteomics. I didn’t have to give them a lecture,” he said. “And so I’d say it’s a combination of the SPAC being there after we worked and spent $200 million to make a semiconductor that sees the molecules of life, and then an educated investor base that normally invests in public companies that knows that this is the future: digitization, artificial intelligence, [and] diagnostics on proteins.” 

Dr. Rothberg is the founder of multiple life science and medical device companies including Butterfly Network, CuraGen, and AI Therapeutics. He is best known for investing high-speed, DNA sequencing.

 

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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.

Read More: EXCLUSIVE: An asset manager overseeing nearly $100 billion divested from Exxon on concerns it is failing to move fast enough to address climate change.

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. 

Read more: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months.

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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Billionaire Bernard Arnault is launching a SPAC, as the blank-check boom spreads to Europe

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Bernard Arnault is the fourth-richest person in the world, according to Bloomberg

Luxury goods billionaire Bernard Arnault has joined the hoards of investors and celebrities launching blank-check companies, and has teamed up with the former head of Italian financial services firm UniCredit to launch a SPAC.

The world’s fourth-richest person and owner of LVMH has teamed up with former UniCredit chief executive Jean Pierre Mustier to create a special-purpose acquisition company with a focus on “innovative” European financial firms.

A special-purpose acquisition company – or SPAC – is an entity that exists solely to list on the stock exchange to raise money, in the hope of finding and merging with a target company to take it public.

More than 140 SPACs have gone public in the US this year, raising more than $45 billion. But the SPAC boom is catching the interest of European investors. Amsterdam has emerged as a hub, although the numbers remain far smaller than in the US.

Read more: Tom Finke recounts how he went from running a $345 billion money manager to joining in the SPAC boom as a sponsor – and shares 3 characteristics investors should look for in an ideal blank-check company

Mustier and former Bank of America banker Diego De Giorgi will be the operating partners of the SPAC, which will be called Pegasus Europe and list in Amsterdam, according to the Financial Times.

Tikehau Capital and Arnault’s Financière Agache holding company will be strategic and financial sponsors. A statement released by Tikehau said they will “bring meaningful resources and support to the company.”

Arnault – who owns brands including Christian Dior, Louis Vuitton and Givenchy – is the latest in a long line of big-name SPAC sponsors. Hedge fund boss Bill Ackman floated a $4 billion SPAC last year, while former Credit Suisse boss Tidjane Thiam has one in the pipeline. 

Basket player Shaquille O’Neal and quarterback and campaigner Colin Kaepernick are among the celebrities to have backed SPACs.

Ex-Commerzbank boss Martin Blessing is reportedly planning to list a shell company in Amsterdam.

“There is in Europe a need for growth capital,” Mustier told Bloomberg TV on Monday. He said the sponsors “share the same vision, to bring capital to companies in Europe. And we chose, naturally, the financial sector to do that.”

The four sponsors plan to buy at least 10% of the SPAC’s shares at IPO, Tikehau said, and to commit to a “substantial forward purchase agreement.”

Read more: Short-seller Carson Block says the day-trading revolution that hit GameStop and other stocks is changing the playing field for investors like him. Here’s how his firm is reinventing itself – and what he’s betting against today

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SPAC NextGen Acquisition jumps 40% after report of deal to take EV truck maker Xos public

Xos UPS truck.
Rendering of Xos UPS truck.

  • Shares of SPAC NextGen Acquisition Corp. jumped as much as 40% on Monday afternoon after reports of a potential deal with EV truck maker Xos.
  • NextGen Acquisition was founded by ex-Goldman Sachs banker George Mattson and ex-Carlyle Group chairman Gregory Summe.
  • The group raised $375 million in an IPO last November and have been looking for an industrial or healthcare-related partner to take public since.
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SPAC NextGen Acquisition Corp. jumped as much as 40% on Monday before paring gains after a Reuters report suggested the company is in talks to take the EV truck-maker Xos Trucks public.

According to Reuters sources, the special purpose acquisition company is in discussions with investors about raising financing for the deal and an agreement could be announced as earlier as this month.

Insider’s request for comment from Xos and NextGen went unanswered, and the companies declined Reuters’ request from comment.

NextGen was formed by ex-Goldman Sachs banker George Mattson and ex-Carlyle Group chairman Gregory Summe, who raised $375 million in an IPO back in November. The company has been looking for a partner to take public ever since, and with EVs booming, Xos is a solid option.

Read more: Credit Suisse says to buy these 16 ‘highest-conviction’ stock picks that are set to outperform despite the market’s contrarian view

Xos, previously known as Thor, creates state-of-the-art electric commercial vehicles that focus on reducing operating costs for clients. It boasts its own operating system and customers like UPS and the cash handling company Loomis, among others.

The reported deal between NextGen and Xos takes advantage of two of the most popular trends in the markets today: SPACs and EVs.

A special purpose acquisition company, or SPAC, is a ‘blank-check’ firm that doesn’t have any business operations of its own. Rather, SPACs goal is to merge with private companies using funds from their initial public offerings (IPOs). This allows the private company to skip the burdensome regulatory procedures that can slow a public offering.

In the past, SPACs were a rare phenomenon not usually seen in the markets, however last year saw a boom in SPAC offerings. In fact, 219 SPACs raised $73 billion in proceeds in 2020, representing a year-over-year jump of 462% which outpaced traditional IPOs by $6 billion.

High profile companies that have gone public via SPACs include Virgin Galactic, DraftKings, and Nikola.

Xos competitor Proterra also announced it has a SPAC deal in the works with Chamath Palihapitiya’s ArcLight Transition Corp. last month. That deal valued the newly combined entity at $1.6 billion.

Read more: A wealth management research chief shares 6 stock-market sectors to buy as the country reopens and the economy experiences its ‘best single year of GDP growth since 2000’

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