It's official. Lucid Group is now one of the most valuable electric-vehicle companies on the planet, and investors are piling into the stock.
$LUCID GROUP INC(LCID.US)$ and the special-purpose acquisition company Churchill Capital IV closed their merger on Friday. Lucid rang scheduled to ring the opening bell at the Nasdaq market on Monday morning, while the stock symbol changed from CCIV to LCID.
The truly important fact about the merger closing is that $4.4 billion comes into the company's coffers. That is enough to sustain Lucid for years while it commercializes its Lucid Air, to be built in an Arizona manufacturing facility.
SPAC-merger stocks have a tendency to pop on the day a symbol changes. Completing a merger removes the risk that investors will vote it down, or that it will be derailed in some other way. Funds tend to wait until a merger goes through before buying shares.
Lucid shares were up almost 11% in early trading Monday. Lucid shares rose 5.9% Friday, the day the merger closed, a strong gain compared with the broader market. The S&P 500 gained 1% and the Dow Jones Industrial Average rose 0.7%.
The company's financial strength is one reason investors like the stock. Lucid is valued at about $42 billion based on the 1.6 billion shares outstanding now that the merger is completed. That makes Lucid the fourth most valuable EV franchise, trailing behind $Tesla, Inc.(TSLA.US)$, $Byd Company Limited(01211.HK)$, and $NIO Inc.(NIO.US)$.
Lucid is also a top 15 automaker by value, with a capitalization a little bigger than $FERRARI N.V.(RACE.US)$.
Management is another favorable factor. Investors have confidence that CEO Peter Rawlinson, who helped Tesla launch the Model S, can bring the Lucid Air to market later this year.
"Lucid's mission is to truly mass industrialize electric cars and electric powertrain systems through the development of the most advanced technology imaginable," said Rawlinson in the company's Monday news release. "Lucid Air represents the next generation of EVs and creates new standards for interior comfort, range, efficiency, and power."
(END) Dow Jones Newswires
July 26, 2021 11:10 ET (15:10 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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