Lucid
- Churchill Capital IV fell 35% in pre-market trading after Lucid Motors struck a deal to go public through SPAC.
- The deal will generate $ 4.4 billion for Lucid, which plans to use the funds to expand its facilities in Arizona.
- Churchill’s transaction values Lucid at about $ 24 billion at PIPE’s offer price of $ 15.00 per share.
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Churchill Capital IV’s shares fell up to 35% at the start of Tuesday’s trading session after the announcement of the merger of the blank check company with Lucid Motors.
Electric vehicle maker Lucid confirmed it would go public through a special-purpose acquisition company run by financier Michael Klein with a pro forma equity value of $ 24 billion.
The deal will generate about $ 4.4 billion in cash for Lucid, 14, who plans to use the funds to expand his Arizona plant. The facility has a production capacity of 365,000 units per year on a scale.
The pre-market performance of Churchill’s shares is a reversal from previous sessions, when reports on the business generated consecutive rises.
Speculation about the business has been around for more than a month. In early February, Churchill Capital IV’s shares rose 33% in a report that SPAC was approaching a deal. On Monday, the stock soared 19% after Bloomberg said a deal could be announced on Tuesday.
Lucid’s deal with Churchill, due to close in the second quarter of this year, marks one of the highest profile SPAC arrangements in the EV space after a wave of interest in electric vehicle startups and automotive technology suppliers. This may have been caused by a recovery in Tesla’s shares in the past 12 months. Peter Rawlinson, the company’s CEO and CTO, is known for his work as Tesla’s chief engineer for Model S. He joined Lucid in 2013.
“I see SPAC only as a tool, another lever to pull, where we can accelerate our trajectory,” Rawlinson told Bloomberg in an interview. “This is a technology race. Tesla understands that. That’s why they are so valuable and Lucid also has the technology.”
The SPAC merger represents the largest capital increase since the Saudi Arabian sovereign fund injected an investment of more than $ 1 billion in 2018. The deal was led by the Public Investment Fund, as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management.
Churchill’s shares fell up to 35% in the pre-market to $ 37.34 per share, after closing at $ 57.37 per share on Monday.