Lucid filed for a new offering of up to $8 billion

[CLTGT]

Not really a surprise and the movement in the stock price reflects that. They have said all along that their current cash would last them into 2023. I am not surprised that they are burning though cash quicker than planned given their production rate, warranty maintenance, etc. I think the analysts know the same. The need to start the process well before they actually get close to running out. It's a phased raise and there is nothing to say that they have to raise the entire amount or that they can't increase that amount a year or more down the road.

 

[magesh]

Avoid bankruptcy and having no cash. They are burning money.

IMO, I don't think so. That is pure speculation.

Here are the facts as I know it & as ever feel free to correct me:
- This is a shelf offering. Execution period is next 3 years to raise 8BN.
- Their current market cap is about $25BN. Yes, the above is almost ... 30%. Optics don't look good, I agree.
- They are priming the public for this. But no action has been announced by LCID to state this is going to happen tomorrow or next week/month/year
- LCID self interest is to see the stock price rise as much as possible & then release the "Kraken" (Had to get some humor in there. You know what I mean.)
- As per Q2 earnings, they are burning about $1.2BN or so per qtr
- They had just under $5BN in cash, assets, deposits, etc ... That puts them through Q2 2023? Possibly Q3 2023 if they trim expenses (capital expenditures and other expenses)
- The offering & knee jerk reaction is to be expected. And LCID did break $15/- today.

Reason for raising cash could be several:
- They have 3.5BN due in another few years. (Forget the exact year. I think it was in 3 or 4 years).
- Their costs are going up, just like everyone else. They have already raised prices once. Raising it once more will be detrimental.
- They cannot (?) cut a product trim line, like what RVN did. I think they will concentrate on getting the P out and start holding off on AGT, once orders are delivered.
- They may want to pay out outstanding loans/debts with this offering. Debt costs money. Which they need to rein in.
- Once P & T starts to roll out, they need to start beefing up their SCs as well. Today SCs have been great; and that standard needs to remain. That costs money. And yes deliveries bring in $, but they are still bleeding $ for every car that was sold till Q2*.
*(No IDK how many cars they need to sell to start becoming profitable. Or how many years. For reference, TSLA took 10 years I think. IPO 2010. Profitable whole year was 2021.)

What I see:
- Supply chain issues are real. Very very real.
- No reason/sense to compare RVN did that; LCID should do this. Diff companies. Diff target markets. Diff benefactors.
- VIN assignments are on the rise.
- More cars are getting delivered - good & bad. More cash flow. Service levels need to be beefed up accordingly. Parts needs to be ready for SC visits. Takes money.
- Every single review has raved about the driving experience+range vs any other luxury EV car. (Sure include Tezla if you want). Yes yes software sucks. I hear you.
- Barring about less than 10 members on this forum, who had significant issues, the overall feedback is great.
- Once P & T starts getting delivered (fingers crossed starting from September 2022), we will see a lot more Lucids out there. And that will generate interest.

Everything is speculative and only LCID (and possibly PIF) will know the nitty gritty. All of the above is my understanding only. Take it with a box of Morton's (or you fav) salt.

FTR, I'm a supporter of LCID & I think long term. I plan to stay the course.

YMMV.

 

[n8236]

I don’t have

 

[digiboxer]

In 9 years, $19 Billion Raised And $9 Billion Of Negative Cash Flow for Tesla​

$; mm	’10	’11	’12	2013	2014	2015	2016	2017	’10-’18
Capital Raised
common stock	269	231	221	360	0	730	1.701	400	3,914
debt	0	72	204	666	2,300	319	2,853	7,138	13,552
stock options	1	11	25	95	100	107	164	259	762
warrants				120	389			53	562
TOTAL	270	314	451	1,242	2,790	1,156	4,719	7,850	18,790
Cash Flow
operating loss	-147	-251	-394	-61	-187	-717	-667	-1,632	-4,057
deprec.	11	17	29	106	232	423	947	1,636	3,400
capital exp.	40	198	239	262	970	1,635	1,280	3,415	8,042
operating CF

It would be interesting to also see the Tesla's stock price range for each year. Lucid's problem is running out of money with its valuation near record low....

 

[Shuasha]

Easy enough. They did nothing until deliveries started in 2013, then it bounced around a bit in the same range. It wasn't until 2020 until it really rocketed up, which is when they were profitable. Keep in mind, the prices on this are after 2 or 3 splits.

I bought in on this dip, and had bought some last week hoping that was the bottom. At least my cost basis is now at $20.

 

[limtless]

What I see:

1. - Supply chain issues are real. Very very real.
2. - No reason/sense to compare RVN did that; LCID should do this. Diff companies. Diff target markets. Diff benefactors.
3. - VIN assignments are on the rise.
4. - More cars are getting delivered - good & bad. More cash flow. Service levels need to be beefed up accordingly. Parts needs to be ready for SC visits. Takes money.
5. - Every single review has raved about the driving experience+range vs any other luxury EV car. (Sure include Tezla if you want). Yes yes software sucks. I hear you.
6. - Barring about less than 10 members on this forum, who had significant issues, the overall feedback is great.
7. - Once P & T starts getting delivered (fingers crossed starting from September 2022), we will see a lot more Lucids out there. And that will generate interest.

Everything is speculative and only LCID (and possibly PIF) will know the nitty gritty. All of the above is my understanding only. Take it with a box of Morton's (or you fav) salt.

FTR, I'm a supporter of LCID & I think long term. I plan to stay the course.

YMMV.

1. Lucid never disclosed what supply chain issues in any detail. They did say carpet, which is a head-scratcher as we all know of the COVID carpet crisis (sarcasm)
3. Nowhere near the level they should be at.
4. Define more? 996 or whatever is nothing.
6. I argee
7. I hope you are right, but I think T in Q4 and P in Q1 23 at best. They can't make cars and now they offer a stealth package for $6k (ridiculous). Interest doesn't mean success.

I have gone through this with Fisker and the Karma. All it takes is one natural disaster or a bad run of QA even bad PR and Lucid is done. The next 2 quarters are the most important ones. Fingers crossed for sure.

 

[hydbob]

1. Lucid never disclosed what supply chain issues in any detail. They did say carpet, which is a head-scratcher as we all know of the COVID carpet crisis (sarcasm)
3. Nowhere near the level they should be at.
4. Define more? 996 or whatever is nothing.
6. I argee
7. I hope you are right, but I think T in Q4 and P in Q1 23 at best. They can't make cars and now they offer a stealth package for $6k (ridiculous). Interest doesn't mean success.

I have gone through this with Fisker and the Karma. All it takes is one natural disaster or a bad run of QA even bad PR and Lucid is done. The next 2 quarters are the most important ones. Fingers crossed for sure.

You mean like the unprecedented drought in China?

 

[Parachute Adams]

I think it's going to be hard for L to raise debt capital: Accts Receivable and Inventory are peanuts and I assume the real estate has already been mortgaged. And what about exiting debt? Does it have to be paid off before they can add more? Don't know their balance sheet, but my guess is it doesnt support much debt.

On the last earnings call they said they'll run out of cash "well into not 2023"...well obviously you need to have new cash lined up "well before" you run out of what you have.

This suggests another equity (stock) sale and the Saudis will be key: unless they commit to buy a significant % of the new offering I can't imagine the bankers could convince other investors to get excited....stay tuned....

 

[ac.bill]

I find casual and uninformed finance discussions frustrating and generally try to avoid engaging. It seems that very few have bothered to read Lucid's business plan, not just here, but in the professional community. Building a global brand in automobile manufacturing is costly and takes an unavoidably long time. Here's a snapshot (1 of 72 pages) of Lucid's financial projections published in July 2021 for Churchill shareholders before the merger. Watch the free cash flow: note they are on schedule and on budget (YTD burn was 1.6-something as of 2022 Q2 report). Lucid spending mostly on CapEx (factory). Note also that the initial sales forecast for '22 was financially insignificant. (source: Lucid IR site "Lucid investor presentation July 2021")

I do not really want to talk about this but all the random gossip does real damage, ultimately raising the cost, but not availability, of capital. PIF owns over 60%. Lucid will not go broke.

 

[Parachute Adams]

I find casual and uninformed finance discussions frustrating and generally try to avoid engaging. It seems that very few have bothered to read Lucid's business plan, not just here, but in the professional community. Building a global brand in automobile manufacturing is costly and takes an unavoidably long time. Here's a snapshot (1 of 72 pages) of Lucid's financial projections published in July 2021 for Churchill shareholders before the merger. Watch the free cash flow: note they are on schedule and on budget (YTD burn was 1.6-something as of 2022 Q2 report). Lucid spending mostly on CapEx (factory). Note also that the initial sales forecast for '22 was financially insignificant. (source: Lucid IR site "Lucid investor presentation July 2021")

I do not really want to talk about this but all the random gossip does real damage, ultimately raising the cost, but not availability, of capital. PIF owns over 60%. Lucid will not go broke.
View attachment 4383

Re "On Budget": The Churchill projection is for 2022 EBITDA of ($1,090) and it's already ($800) for the first 2 quarters.

 

[ac.bill]

Re "On Budget": The Churchill projection is for 2022 EBITDA of ($1,090) and it's already ($800) for the first 2 quarters.

EBITDA is always a fuzzy number at best. Cash flow and staying funded is all that matters to a young company. Expenses on startup always exceed projection. We know vendor and parts problems have added cost, but as long as they can stay on track, or close to it, on cash flow they'll be fine. Opening the factory before the end of Q1 is the only thing that matters now. Without that there is no company. Yes, brand awareness, sales and service facilities, service and support staff, etc. are important too, but cheap by comparison.

This Phase 2 expansion is critical, but at 250k units/yr. it alone will not support the valuation of the company or fund expansion. Phase 3 will start immediately, land already acquired. It and the mid-size units built there are what will make this all worth doing. Building a new global OEM is risky, difficult, and expensive. Lucid has a workable plan and an incredible team. I liked the plan but it was getting the car that sold me.

If you want to learn about the company read the stuff for yourself. Forum 'experts' are an untrustworthy source.