Stock Momentum

[The_Don]

This jump doesn't seem warranted by the earnings call but I'll take it!

 

[gaskiller]

This jump doesn't seem warranted by the earnings call but I'll take it!

I think the fact that PIF continues to support has ruled out going private or bankruptcy…..at 1.3 billion, it was being priced as if bankruptcy coming. That’s been put in the bin.

 

[Northpointe]

Napoli and the leadership accomplished what they set out to achieve this quarter. And that’s really all that can be expected at this point. The company also reported an operating loss of $830M and added another $1.75B in debt on the balance sheet. So if you're investing based on the story it was a good outcome. But if you’re looking at the fundamentals things are still bleak.

 

[Aka-none]

Napoli and the leadership accomplished what they set out to achieve this quarter. And that’s really all that can be expected at this point. The company also reported an operating loss of $830M and added another $1.75B in debt on the balance sheet. So if you're investing based on the story it was a good outcome. But if you’re looking at the fundamentals things are still bleak.

Inertia is a bitch, it’ll take time to get on track.

 

[bcjenkins]

Re (gift article): https://www.nytimes.com/athletic/77...hared_gift_article_copylink&smid=url-share-ta

I’m neither a golf fan nor a golfer (putt-putt golf doesn’t count), but I see some interesting parallels in the NYT article between the Saudi PIF’s investments in LIV Golf and Lucid.

First, the fallacy of the "Bottomless War Chest." LIV insiders seemed to operate under the belief that the PIF possessed "everlasting money" and LIV had "all the time they needed" to reach sustainability. Yet, once PIF leadership decided the financial trajectory was untenable, their withdrawal was abrupt.

An oft-mentioned sentiment is that Lucid will never face solvency issues because Saudi Arabia owns substantial equity and will continuously backstop every liquidity shortfall. The LIV story illustrates that when tolerance expires, the financial support pivot can be swift.

A second parallel is related to macro shocks and domestic prioritization. The turning point for LIV was not merely internal league performance; it was catalyzed by Middle Eastern geopolitical conflict, regional infrastructure disruptions, and pressure on Saudi oil revenues. It’s logical that downward pressure on Saudi oil revenue would influence the PIF’s investment strategy.

While Lucid established AMP-2 in KAEC to align directly with localized manufacturing goals, heavy capital expenditures in Arizona and international expansion still, I would think, depend on Riyadh’s risk appetite.

Next is the issue of investor patience. LIV leadership acknowledged that profitability was 5 to 10 years out. For Lucid, the multi-year product roadmap seems clear, but geological turmoil, current US Government hostility toward anything green, and uncertain user adoption of EVs must certainly weigh on the PIFs view of their Lucid investment. (Yes, I know, the Q3 earnings call reiterated the PIF’s commitment—for another year at least.) I know nothing about investment banking, but will the PIF tolerate a Lucid replication of the LIV Golf profitability timeline?

The final parallel I see is focused on outside capital and further dilution, but it’s Friday the 13th, so I’d rather table that point!

It is worth noting where the parallels clearly diverge:

First, LIV was an asset-light intellectual property and entertainment concept with little liquidation value. Lucid, by contrast, owns physical stamping plants, powertrain assembly lines, proprietary inverter/motor IP, battery architecture, and commercial supply agreements (the deal with Aston Martin, for example).

Second, LIV was a cultural (hobby?) experiment, while Lucid is anchored directly into the Kingdom's industrial diversification roadmap and is supposed to serve as the cornerstone for Saudi Arabia's domestic automotive manufacturing hub in KAEC. (I don't think this point can be overstated.)

I’m not worried that the PIF’s experience with LIV will cause them to second-guess their Lucid investment because I think the investment reasons are different (social experiment vs. core strategy), but if the current conflicts are exasperated for an extended period, the whole AMP-2 strategy could be turned upside down and put added pressure on the Lucid executive team to perform. They should be left to focus their energies on fixing internal issues (service and support, for example) rather than having to deal with the impacts of unnecessary wars and supply chain disruptions.

This past Sunday afternoon, my wife and I went to see the Chattanooga Symphony, which was performing the soundtrack to Star Wars: The Empire Strikes Back. (It was fabulous.) And so… may The Force be with us.

 

[gaskiller]

Re (gift article): https://www.nytimes.com/athletic/77...hared_gift_article_copylink&smid=url-share-ta

I’m neither a golf fan nor a golfer (putt-putt golf doesn’t count), but I see some interesting parallels in the NYT article between the Saudi PIF’s investments in LIV Golf and Lucid.

First, the fallacy of the "Bottomless War Chest." LIV insiders seemed to operate under the belief that the PIF possessed "everlasting money" and LIV had "all the time they needed" to reach sustainability. Yet, once PIF leadership decided the financial trajectory was untenable, their withdrawal was abrupt.

An oft-mentioned sentiment is that Lucid will never face solvency issues because Saudi Arabia owns substantial equity and will continuously backstop every liquidity shortfall. The LIV story illustrates that when tolerance expires, the financial support pivot can be swift.

A second parallel is related to macro shocks and domestic prioritization. The turning point for LIV was not merely internal league performance; it was catalyzed by Middle Eastern geopolitical conflict, regional infrastructure disruptions, and pressure on Saudi oil revenues. It’s logical that downward pressure on Saudi oil revenue would influence the PIF’s investment strategy.

While Lucid established AMP-2 in KAEC to align directly with localized manufacturing goals, heavy capital expenditures in Arizona and international expansion still, I would think, depend on Riyadh’s risk appetite.

Next is the issue of investor patience. LIV leadership acknowledged that profitability was 5 to 10 years out. For Lucid, the multi-year product roadmap seems clear, but geological turmoil, current US Government hostility toward anything green, and uncertain user adoption of EVs must certainly weigh on the PIFs view of their Lucid investment. (Yes, I know, the Q3 earnings call reiterated the PIF’s commitment—for another year at least.) I know nothing about investment banking, but will the PIF tolerate a Lucid replication of the LIV Golf profitability timeline?

The final parallel I see is focused on outside capital and further dilution, but it’s Friday the 13th, so I’d rather table that point!

It is worth noting where the parallels clearly diverge:

First, LIV was an asset-light intellectual property and entertainment concept with little liquidation value. Lucid, by contrast, owns physical stamping plants, powertrain assembly lines, proprietary inverter/motor IP, battery architecture, and commercial supply agreements (the deal with Aston Martin, for example).

Second, LIV was a cultural (hobby?) experiment, while Lucid is anchored directly into the Kingdom's industrial diversification roadmap and is supposed to serve as the cornerstone for Saudi Arabia's domestic automotive manufacturing hub in KAEC. (I don't think this point can be overstated.)

I’m not worried that the PIF’s experience with LIV will cause them to second-guess their Lucid investment because I think the investment reasons are different (social experiment vs. core strategy), but if the current conflicts are exasperated for an extended period, the whole AMP-2 strategy could be turned upside down and put added pressure on the Lucid executive team to perform. They should be left to focus their energies on fixing internal issues (service and support, for example) rather than having to deal with the impacts of unnecessary wars and supply chain disruptions.

This past Sunday afternoon, my wife and I went to see the Chattanooga Symphony, which was performing the soundtrack to Star Wars: The Empire Strikes Back. (It was fabulous.) And so… may The Force be with us.

Good assessment. Saudi needs Lucid to succeed and Lucid needs Saudi. I feel the past Lucid leadership became complacent since they had virtually unlimited funding. They dropped the ball many times. Sometimes such backing makes you incompetent, quite evident in how they handled software and service! With them gone, I’m hoping Napolis team will be able to turn things around.

The recent Black Friday sale is a good example. Outside financing means Lucid doesn’t have to foot the bill for financing incentives which could run 5-10k per vehicle. If they sell 5k, should save them 30-40 million in q4.

 

[socktucker]

I can’t believe the CEO said that Lucid didn’t even know where its cars were. Why would he say that? That’s just like saying “hey things are actually way worse than you guys even thought!”. Didn’t they run that by PR or someone first? What else don’t we know Stock is down in the 2’s again since then.

 

[bcjenkins]

I can’t believe the CEO said that Lucid didn’t even know where its cars were. Why would he say that?

I like the transparency, but I understand what you're saying.

Providing only the necessary information is often the safest path; providing more than necessary creates risk.

 

[Stephan94920]

I can’t believe the CEO said that Lucid didn’t even know where its cars were. Why would he say that? That’s just like saying “hey things are actually way worse than you guys even thought!”. Didn’t they run that by PR or someone first? What else don’t we know Stock is down in the 2’s again since then.

Found this interesting as well: "People [...] do not want to talk about the future. They say, "When can I service my car?" Admittedly, as I said before, we were not structured with the right level of support across the markets we operated."

Further confirmation that Lucid prioritizes new car sales over care and support for existing owners. An unserious company that has no one to blame but themselves for the value destruction for shareholders. (Not a shareholder, fortunately, but feel for everyone that is).

 

[Aka-none]

Found this interesting as well: "People [...] do not want to talk about the future. They say, "When can I service my car?" Admittedly, as I said before, we were not structured with the right level of support across the markets we operated."

Further confirmation that Lucid prioritizes new car sales over care and support for existing owners. An unserious company that has no one to blame but themselves for the value destruction for shareholders. (Not a shareholder, fortunately, but feel for everyone that is).

Prioritized

I believe that was the old management