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Saudi Buyout Article

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ikonn

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Some (basic) analysis about the pros of a Saudi buyout in this article. Not sure if I completely agree but it sure is a possibility. In fact, low stock prices like what we are seeing inevitably open the door to being a takeover target. If not the Saudis, then which other car company might want to swoop in to get access to the Lucid tech? If not a takeover then certainly a JV or collaboration which has been discussed before of course.

https://www.nasdaq.com/articles/as-...record-lows-is-a-saudi-buyout-the-last-resort
 
Not so hard if PIF decides to get out or reduce their position. I’m not saying it’s likely, but stranger things have happened.

Cash flow is a problem. Sales are a problem. Gravity should help but the best product is mid size and that’s 3 years out. Profitability might take 10+ years. If PIF is ready for the cash squeeze and in it for the long haul (I think they are) then great. Smart investors always have a backup plan though.
 
ikonn said:
Not so hard if PIF decides to get out or reduce their position. I’m not saying it’s likely, but stranger things have happened.

Cash flow is a problem. Sales are a problem. Gravity should help but the best product is mid size and that’s 3 years out. Profitability might take 10+ years. If PIF is ready for the cash squeeze and in it for the long haul (I think they are) then great. Smart investors always have a backup plan though.
Click to expand...
PIF won’t sell or take it private. They want a car manufacturing plant in Saudi- they want jobs for their citizens. They will never sell to another company. Taking private means company not American but Saudi….sales will collapse. Easier to just keep throwing a few billion at it until Lucid establishes.
 
ikonn said:
Not so hard if PIF decides to get out or reduce their position. I’m not saying it’s likely, but stranger things have happened.

Cash flow is a problem. Sales are a problem. Gravity should help but the best product is mid size and that’s 3 years out. Profitability might take 10+ years. If PIF is ready for the cash squeeze and in it for the long haul (I think they are) then great. Smart investors always have a backup plan though.
Click to expand...
This is not an investment to make profit, this is an investment in the future of Saudi manufacturing.
 
ikonn said:
Some (basic) analysis about the pros of a Saudi buyout in this article. Not sure if I completely agree but it sure is a possibility. In fact, low stock prices like what we are seeing inevitably open the door to being a takeover target. If not the Saudis, then which other car company might want to swoop in to get access to the Lucid tech? If not a takeover then certainly a JV or collaboration which has been discussed before of course.

https://www.nasdaq.com/articles/as-...record-lows-is-a-saudi-buyout-the-last-resort
Click to expand...
Mohit Oberoi? What does he know? There are a lot of these unsubstantiated articles written by foreign amateurs. The WSJ article saying Tesla building factory in Saudi was written by one of them. Just speculation without any concrete evidence. More like clickbait for views.
 
no gas said:
PIF won’t sell or take it private. They want a car manufacturing plant in Saudi- they want jobs for their citizens. They will never sell to another company. Taking private means company not American but Saudi….sales will collapse. Easier to just keep throwing a few billion at it until Lucid establishes.
Click to expand...
That’s an interesting take.

They won’t sell? They may not sell now but they could certainly sell if they don’t like the projections for the investment. They sold Tesla and backed away from privatizing it pretty easily.

Privatization means the company is Saudi? You can be a private American company, who says the buyout will be by PIF only? Or even a PIF majority?

I agree that PIF’s strategy is to invest in emerging tech and industries in order to diversify away from their traditional holdings. And losing out in Tesla likely makes them pretty committed to LCID (which I am happy about btw). But words like “never” and “throwing billions away” seldom work for good investors.
 
no gas said:
This is not an investment to make profit, this is an investment in the future of Saudi manufacturing.
Click to expand...
Yeah, there’s that, but perhaps more importantly, it’s an investment to reduce the dependence on older sectors. PIF guys are smart, they see the future. Or at least, alternative futures.
 
Pragmatic said:
Hard for a car company to take over with the Saudi PIF owning 60% of the stock and with option to own over 70%
Click to expand...

All you need is a willing seller and a willing buyer. Anything can, and does, happen.

But as I said, some sort of collab could certainly be possible, and likely probable if LCID continues the cash burn for too long.
 
The PIF has a whole going green plan with a huge amount of investments taking place to transition away from the pure reliance on oil into green energy projects. It’s planned out already for 2030 and beyond I believe. If anything, Lucid is probably safe until 2030 at least with further investments from the PIF if needed probably forthcoming.

All speculation but it does seem the PIF is heavily invested on seeing Lucid succeed. Heck, they just need to raise the price of oil by $1 for a day and could top up Lucid’s bank account easily with little to no impact. $1 billion is chump change for the PIF especially when the oil division of the country made a $121 billion profit.
 
HC_79 said:
The PIF has a whole going green plan with a huge amount of investments taking place to transition away from the pure reliance on oil into green energy projects. It’s planned out already for 2030 and beyond I believe. If anything, Lucid is probably safe until 2030 at least with further investments from the PIF if needed probably forthcoming.

All speculation but it does seem the PIF is heavily invested on seeing Lucid succeed. Heck, they just need to raise the price of oil by $1 for a day and could top up Lucid’s bank account easily with little to no impact. $1 billion is chump change for the PIF especially when the oil division of the country made a $121 billion profit.
Click to expand...

Agree with most of that but then there’s this…$1B, $2B, pretty soon we’re talking real money.

To be clear, I’m totally on board with PIF propping up LCId to weather the tough times, as long as it does not involve any stock dilution or devaluation of course! Need the mid size SUV to make it to market. By then maybe I’ll have enough gains so that I can park one in my garage for free.
 

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And of course, war in the Middle East (or the World), will change everybody’s plans 😳
 
ikonn said:
Agree with most of that but then there’s this…$1B, $2B, pretty soon we’re talking real money.

To be clear, I’m totally on board with PIF propping up LCId to weather the tough times, as long as it does not involve any stock dilution or devaluation of course! Need the mid size SUV to make it to market. By then maybe I’ll have enough gains so that I can park one in my garage for free.
Click to expand...
PIF has 900 billion to play with, and they recently reduced NEOM to just a few miles. That frees up a lot of cash to throw around at industries they want to develop in Saudi- entertainment, sport and of course EV manufacturing. EV is the future, and this is a golden opportunity for newcomers to get into the automobile business. All that ICE engine knowledge is useless. Playing field is leveled…China saw this as a golden opportunity to dominate the automobile industry- smart and forward thinking. Saudi have the same vision. Saudi won’t ditch Lucid, they want manufacturing in Saudi Arabia…..jobs for the massses!
 
no gas said:
PIF has 900 billion to play with, and they recently reduced NEOM to just a few miles. That frees up a lot of cash to throw around at industries they want to develop in Saudi- entertainment, sport and of course EV manufacturing. EV is the future, and this is a golden opportunity for newcomers to get into the automobile business. All that ICE engine knowledge is useless. Playing field is leveled…China saw this as a golden opportunity to dominate the automobile industry- smart and forward thinking. Saudi have the same vision. Saudi won’t ditch Lucid, they want manufacturing in Saudi Arabia…..jobs for the massses!
Click to expand...

I'm inclined to agree. Continuing my knife catching act and just had an order execute to buy more at $2.32 today. Fingers crossed. :)
 
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