redditrabbit
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if I were Lucid, I would try to talk PIF out of any potential buyout.
Why?
1. Stock market is free advertising. If you allow people to take a stake in your business, it’s very likely that they will take an interest in your product. And when people, rich people who are able to invest, know about the stock, they would get to know the product. This is one of the main reasons of Tesla’s success: getting people identified with the company, the product and the vision.
2. Buyout at a low price will hurt brand image. imagine you force millions of retail investors to sell at a loss. How would they treat your brand?
3. Lucid benefits from being an American public company. It can allow you to better connect with local or federal government. Lucid has put down its roots in Arizona, getting bought out by a foreign fund will decrease the friendliness to the company for the US government and public.
4. PIF is already the majority shareholder and it’s already able to make any change they want. Why would they ever want to buy out just to make few more changes if they are unsatisfied with how the company is being run?
And most importantly - the buyout will severely tarnish the reputation of PIF. When VCs, banks, startup founders approach PIF for investment, they don’t just expect 30% return. They expect 2000% return. Now if PIF has the reputation of elbowing smaller investors out for a small gain, and keeping the rest of the 10x gain for itself, why would anyone work with PIF?
I would argue buying some shares on the market and keeping the company public might result in more gain in the long term, with less investment!
Why?
1. Stock market is free advertising. If you allow people to take a stake in your business, it’s very likely that they will take an interest in your product. And when people, rich people who are able to invest, know about the stock, they would get to know the product. This is one of the main reasons of Tesla’s success: getting people identified with the company, the product and the vision.
2. Buyout at a low price will hurt brand image. imagine you force millions of retail investors to sell at a loss. How would they treat your brand?
3. Lucid benefits from being an American public company. It can allow you to better connect with local or federal government. Lucid has put down its roots in Arizona, getting bought out by a foreign fund will decrease the friendliness to the company for the US government and public.
4. PIF is already the majority shareholder and it’s already able to make any change they want. Why would they ever want to buy out just to make few more changes if they are unsatisfied with how the company is being run?
And most importantly - the buyout will severely tarnish the reputation of PIF. When VCs, banks, startup founders approach PIF for investment, they don’t just expect 30% return. They expect 2000% return. Now if PIF has the reputation of elbowing smaller investors out for a small gain, and keeping the rest of the 10x gain for itself, why would anyone work with PIF?
I would argue buying some shares on the market and keeping the company public might result in more gain in the long term, with less investment!