Lucid Announces Public Offering of Common Stock and Corresponding Investment by an Affiliate of PIF

[Joe]

NEWARK, Calif., Oct. 16, 2024 /PRNewswire/ -- Lucid Group, Inc. (Nasdaq: LCID; "Lucid") announced today the commencement of a public offering of 262,446,931 shares of its common stock. The underwriter may offer the shares of common stock from time to time for sale in one or more transactions to purchasers directly, through agents or through brokers in brokerage transactions on Nasdaq, in the over-the-counter market, through negotiated transactions or in a combination of such methods, or otherwise at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.

Lucid intends to grant the underwriter a 30-day option to purchase up to 39,367,040 additional shares of its common stock.

In addition, Lucid's majority stockholder and affiliate of the Public Investment Fund ("PIF"), Ayar Third Investment Company ("Ayar"), has indicated that they intend to purchase 374,717,927 shares of common stock from Lucid in a private placement concurrently with the public offering, subject to certain conditions, at the same price per share initially to be paid by the underwriter for the public offering. The private placement is subject to completion of the public offering and customary closing conditions. As a result of these purchases, Ayar expects to maintain its approximate 58.8% ownership of Lucid's outstanding common stock. In addition, Ayar has indicated that they intend to purchase from us, in the event that the underwriter exercises its option, additional shares of our common stock to maintain its ownership of Lucid's outstanding common stock, and an additional closing for such purchase would be held 10 days after the underwriter's exercise of its option.

Lucid intends to use the net proceeds from the public offering, as well as from the private placement by its majority stockholder, for general corporate purposes, which may include, among other things, capital expenditures and working capital.

Read more here: https://ir.lucidmotors.com/news-rel...-announces-public-offering-common-stock-and-0

 

[new owner]

Well
That’s not gonna help the stock price

 

[Leftlane]

Dilution….

 

[Tym]

grabbed about 5k shares.

another 20k shares set to buy at 2.7

 

[Benjiron23]

Dilution is never good for shareholders. It’s very discouraging to say the least especially with it now at almost 3 billion shares. At the same time, it’s great to see that the Saudi’s are solidifying their vision with all of these injections. Fortunately I only have a few grand into this so averaging down will be relatively easy for now. PIF has so much invested here at a loss which kind of makes you feel good, right? Lol

 

[Marco]

True.
Good luck to us!

 

[Tim-in-CA]

….. and stock has dropped by 15%!

 

[Steveinarizona]

Dilution….

It will continue to happen. It is a necessary aspect of the growth of a new company with large capital costs.

 

[Vic Lucid]

Lack of liquidity is what kills companies so only very good news for owners. As for existing shareholders, it’s not a stock for the faint of heart.

 

[tonybot]

Do you all foresee a reasonable recovery and prices above $4 once gravity is announced or it is going to be a roller coaster for the foreseeable future? With this hopefully taking off after mid size? What is your internal calculus like and how long are you holding on or averaging down? Is this something we should average down and forget until 2030s?

 

[Vic Lucid]

In my view it all depends on your risk tolerance. I am far from an expert but I would certainly expect continued volatility in this stock for the foreseeable future as there are so many variables. You are, of course, also at the whim of the Saudis and their plans which may or may not be good for minority shareholders. All you know for sure is that the Saudis, just like any major shareholder, will make decisions in their own best interest and not in yours.

 

[Lucken]

Do you all foresee a reasonable recovery and prices above $4 once gravity is announced or it is going to be a roller coaster for the foreseeable future? With this hopefully taking off after mid size? What is your internal calculus like and how long are you holding on or averaging down? Is this something we should average down and forget until 2030s?

Anyone that answers that question definitively doesn’t know what they’re talking about. IOW nobody knows.

 

[Tâm]

….. and stock has dropped by 15%!

I think in general, it's a dilution issue, so some depreciation is expected.

The way I see it: Money is money: it helps paying the bills and that's a good thing despite stock price drop.

 

[Adnillien]

Lucid told investors earlier that more money would be needed before the midsize gets into production. For many investors this was already baked in because it was not a surprise.

 

[Leftlane]

It will continue to happen. It is a necessary aspect of the growth of a new company with large capital costs.

And that hasn’t figured out a way to make money on the product they produce yet. Not all newer companies with large capex need an endless supply from a sugar daddy. In no way is constant dilution a good thing either.

 

[par11768]

Expect additional dilution with the current burn rate. Gravity may do better but there is a limited market for expensive full size SUVs so this company will continue to lose money until they can produce a high volume car. This offering is raising $1.67 billion and the company is projecting a loss of $775 million for this quarter alone. Before the raise they had almost enough cash to last through 2025. This raise will not get them close to launching a smaller SUV.

 

[steveairgt]

As much as I like the Gravity (I may even trade my AGT for a Gravity), it really competes in the price category as the Model X. Yes it’s superior to the X as I’m a former X owner, the real volume is in the Model Y category. Perhaps Lucid should have skipped the high end SUV and went directly to the mid-level SUV, since the Model Y is the highest selling SUV in the country, especially in California. That’s where the real money/volume is.

Before I bought my AGT, I owned a Tesla S and X. I’m not the type of buyer who would buy a Model 3 or Y, but as an investor, that’s where the money and volume is.

 

[DreamTour]

As much as I like the Gravity (I may even trade my AGT for a Gravity), it really competes in the price category as the Model X. Yes it’s superior to the X as I’m a former X owner, the real volume is in the Model Y category. Perhaps Lucid should have skipped the high end SUV and went directly to the mid-level SUV, since the Model Y is the highest selling SUV in the country, especially in California. That’s where the real money/volume is.

Before I bought my AGT, I owned a Tesla S and X. I’m not the type of buyer who would buy a Model 3 or Y, but as an investor, that’s where the money and volume is.

Patience will be rewarded. Fisker went straight to the "high volume segment" out the door and now they are defunct. There's still lots for Lucid to sort out to be able to handle that scale. Not just making the cars but keeping them on the road. Given that they aren't taking any "safe bets" when it comes to using validated long in use parts there's much for them to get right to get their whole supply chain quality to a point where they won't be crippled with so many in the shop.

The service centers are just treading water with the low volume Air. I had most of the early issues in my car being an early build and I can see that they've solved a lot of them (down to root cause). But there's still more wood to chop.

I'm just glad they have the runway to clean sheet it and do it right. Makes for a unique car.

 

[par11768]

The strategic mistake was launching a sedan, following the Tesla model roadmap of large sedan, large suv at high price points to learn and earn but the Model S was ahead of the competition and unique at the time, so it sold in high volumes. Since that time, the US market ihas become very focused on SUVs. Lucid should have made the Gravity the first car followed by a smaller SUV as they learned to scale.

 

[Batteryman]

Expect additional dilution with the current burn rate. Gravity may do better but there is a limited market for expensive full size SUVs so this company will continue to lose money until they can produce a high volume car. This offering is raising $1.67 billion and the company is projecting a loss of $775 million for this quarter alone. Before the raise they had almost enough cash to last through 2025. This raise will not get them close to launching a smaller SUV.

This raise will get them into mid-2027, also, the SUV will bring in more revenue, at least X4...this is good news actually. Yeah, stock dropped, if you are a longterm holder, so what. If you are a trader....well, you are taking a big risk trading any stock....

Buy hold a decade, don't stress out about these nuances....what matters is the stock price in 10 years....