Tesla Rival Lucid's Shares Soar on Takeover Speculation

Shares of Lucid Motors rose on Friday after rumors of being acquired by a Saudi Arabia fund.

Lucid Group (LCID) - Get Free Report saw its shares nearly double on speculation that Saudi Arabia's Public Investment Fund, the country's sovereign wealth fund, might be preparing to buy the shares it doesn't already own.

The fund currently owns a 62% stake in the Newark, Calif., producer of higher-end EVs.

At last check the shares were up 45%, as investors were eager for Lucid to receive a further infusion of capital. 

A report from Betaville speculating on the prospect of a deal could not be confirmed. The report has been cited by a number of media outlets. Lucid said it doesn't comment on speculation.

Last November Lucid said it conducted a $600 million at-the-market program and raised a total of $1.515 billion. That included $915 million that was raised through a private placement of 85.7 million shares with Ayar Third Investment, an affiliate of the Public Investment Fund.

Shares of Lucid fell by more than 50% during the past year as the company had lowered its production guidance in August for the remainder of 2022. Back in Nov. 16, 2021, Lucid shares were trading for $55.52.

On Jan. 12, the company said it produced 3,493 vehicles, up by 53% sequentially, and manufactured a total of 7,180 vehicles in 2022, beating its guidance of producing 6,000 to 7,000 vehicles.

Lucid will report its fourth-quarter results on Feb. 22.

Lucid had originally estimated it would produce 20,000 of its Air electric luxury sedans in 2022. The company had to lower its guidance twice, in February and August, due to global supply chain disruptions that affected all auto companies.

CEO Peter Rawlinson in August attributed its second-quarter losses of $555.3 million, or 33 cents a share, to "extraordinary" supply chain and logistics challenges. Revenue in the period was $97.3 million

"We've identified the primary bottlenecks, and we are taking appropriate measures - bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organization."

For the third quarter Lucid reported a net loss of $530 million on $195.5 million in revenue.

Lucid Reduces Prices

Lucid is trying to ramp up deliveries on its Air Grand Touring model by reducing the price by about 10% to $138,000 from $154,000, according to its website.

The reduction was made possible by removing several features on the vehicle that were previously standard equipment. Air Grand Touring's DreamDrive Pro ADAS suite, valued at $10,000, Surreal Sound Pro, at $4,000, and 21-inch Aero Blade wheels, at $2,000, are now optional features.

Lucid’s other model, The Touring, sells for a starting price of $107,000.

The electric vehicle maker released new details about Gravity, its first luxury electric SUV, on Nov. 15.

Rawlinson said in a statement that Gravity "builds upon everything we have achieved thus far, driving further advancements of our in-house technology to create a luxury performance SUV like none other."

Sherry House, Lucid's, chief financial officer, said that the company believed Gravity would "unlock a very large and incremental addressable market for us."

Gravity will be produced and available to purchase in 2024, but Lucid will be taking early reservations in 2023 and promises more information at that time.