Lucid Group, Inc. Announces Investment of $1.0 Billion by an Affiliate of PIF
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Stock up .50 cents in pre-trading
Saw the news. For those not willing to buy a Lucid due to the possibility of them going bankrupt, note the deep Saudi backed pockets. For Fisker and Rivian, I could see the concern. Had a neighbor who sold his Fisker due to the problems they were have. Later that same day when the news became more widespread, the CarMax offers to buy the same car dropped $7k. Their next door neighbor who owned a Rivian SUV also sold theirs, fearing the ability of the company to survive.
NoseyReporter
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The middle east is making big investments in automotive. Lucid has amazing support here.
Plus I bet they hold a grudge with Elon and have something to prove.
Plus I bet they hold a grudge with Elon and have something to prove.
xponents
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Fantastic. This should more than sufficiently tide Lucid over until at least Gravity, which is shaping up to be an extremely high-selling car (based on its price and how good it is vs competitors.. then again the air had the latter going for it).
Never thought I'd say it, but thank goodness for the Saudis... I would never have foreseen their support being THIS extensive. The fact that they are sticking with Lucid and continuing to strongly support it through their struggles says just how important Lucid is to them.
Never thought I'd say it, but thank goodness for the Saudis... I would never have foreseen their support being THIS extensive. The fact that they are sticking with Lucid and continuing to strongly support it through their struggles says just how important Lucid is to them.
They have to, kind of. Making such a big deal of Lucid being the first auto mfg in the Kingdom with the first factory, it wouldn't look good if that company went belly up.
NoseyReporter
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No egg for this face.
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The fact is that Lucid's technology and design innovations are superior to legacy auto manufacturers. The retail selling and service build-out continues as does the charging network of EA., although all have a long way to go. The PIF's commitment to its success should be clear. Recall that 6 or 7 years ago Wall Street compared Tesla to legacy companies when it valued TSLA without any appreciation of its technological advantages over ICE. It is not a good idea to short a stock when it has the type of financial backing that Lucid enjoys.
MidwestLucidDude
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This should surprise no one.
The Saudis who own about 60% of Lucid are not going to let Lucid go under; there is just too much to lose. At the same time there is so much to gain if Lucid makes it production of their next two models they propose that come after Gravity. That was the inflection point when Tesla, after releasing their Model 3 and Model Y, really took off. And as the recent Biden proposal to put in place ever tightening tailpipe rules, the push to electric will only get bigger. The next 3-5 years has a potential big payoff for Lucid and the Saudis know that. This cash infusion shows that they are in fact banking on it.
The Saudis who own about 60% of Lucid are not going to let Lucid go under; there is just too much to lose. At the same time there is so much to gain if Lucid makes it production of their next two models they propose that come after Gravity. That was the inflection point when Tesla, after releasing their Model 3 and Model Y, really took off. And as the recent Biden proposal to put in place ever tightening tailpipe rules, the push to electric will only get bigger. The next 3-5 years has a potential big payoff for Lucid and the Saudis know that. This cash infusion shows that they are in fact banking on it.
Agreed. Even if the PIF was 10 billion into Lucid, just a drop in their ever-expanding bucket.
MidwestLucidDude
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They increased the shares of the company for this investor. Two things with that:
1. A company can get a cash infusion as a loan such as a bond, or from stock which increases shareholder equity. A bond or loan is safer for the investor in that they will get paid out ahead of stockholders if the company folds. However even at today's high rates, a bondholder will get only 7-10% (rough guess), return on their money. The positive for Lucid is getting this money from stock is riskier for the investor. If the company folds they could lose a lot of money. The upside is huge. If the stock comes roaring back the new shareholder could make 100-200-300% or more on their investment. The reason they went the stock route is the reward outweighs the risk.
2. For the rest of us, we all own a smaller part of the company as now someone has been given more shares. The is the dilution. Our chunck of the company has been diluted. In some situation because we have less of the company our stock is worth less. However, in many cases it does not play out that way. In this case there is enough upside to this cash infusion, in the eyes of investors, that the stock has actually rallied. The direction of the stock after an offering like this is often based on perception. Is the cash infusion a last ditch effort of a company about to close, or is the cash infusion going to get the company over the hump and so they can become profitable? For today at least, investors are leaning more to the later.
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Reason number fifty-eleven why I won't even consider selling a share until 2030 at the earliest. I haven't stopped buying and have no intention on doing so. I'm all in!
The news was good timing. I believe Fisker just removed inventory from their website and is fairly obviously preparing for bankruptcy.
I really think people reflect too much on sales numbers alone when weighing the risk of the 3 "new" "American" driven car manufactures and attempting to predict future success and viability. They certainly misinterpret that Rivian has more risk to it from its success and burn cash flow in comparison to Lucid with a stronger cash flow + less burn atm.
I really think people reflect too much on sales numbers alone when weighing the risk of the 3 "new" "American" driven car manufactures and attempting to predict future success and viability. They certainly misinterpret that Rivian has more risk to it from its success and burn cash flow in comparison to Lucid with a stronger cash flow + less burn atm.
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The moment I saw the headline I thought, ouch.... that's got to be like a knife to the heart for Fisker. Here they are scrambling for life and the day they're probably filing bankruptcy Lucid says "hey, look at us.... we just got another billion"
Fisker was always going to struggle as it never really seemed to have deep pocket investors which is needed in order for these companies for survive initially. If Lucid didn't have the PIF the future might not have been so bright for them either.
All the headlines are Lucid stock soars! Yes, it's 10% but still $3 which makes most of us significantly underwater still. But I'll take it! 
Since Lucid is building a factory in Saudi I think that is a sign that Saudi will support Lucid into the foreseeable future. Great for us car owners.
Rob Stark
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Fisker and Rivian aren't in the same league. Barely the same sport. Fisker has $140M on hand while Rivian has $9.4B on hand.
Rivian has deep pocketed Angel Investor as well.
Neither Al Qaeda nor ISIS are a threat to House of Bezos.
If The House of Saud falls there will be panic among LCID investors.
MidwestLucidDude
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If he House of Saud falls there will be a lot of panic in a lot of markets, oil included. But that is at best purse speculation, and I'm not sure it will affect Lucid, because as shareholders they can only sell their shares and take a huge loss. As bondholders if they have a covenant, they could call their bonds, I suppose but again highly speculative. I'm more inclined to bet that Tesla will soon unlock full self driving features in their cars so everyone can nap while cruising down the road. ie. it ain't happening any time soon.
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