The Saudi Public Investment Fund, or PIF, bought 265,693,703 shares of Lucid LCID +1.46% (ticker: LCID) stock in a private placement of common stock for an average price of $6.83 a share. It’s a huge $1.8 billion purchase representing almost 15% of the total stock outstanding, before the issuance. – Source
Lucid’s principal shareholder, the Saudi Public Investment Fund, has demonstrated increased faith in the electric vehicle (EV) start-up.
In a private placement of common shares, the Saudi Public Investment Fund (PIF) acquired 265,693,703 Lucid shares (LCID ticker) at an average cost of $6.83 per share. This substantial investment of $1.8 billion equates to nearly 15% of the overall outstanding shares prior to the issuance.
The acquisition has increased PIF’s ownership stake from approximately 60% to roughly 65% of the total common shares. PIF has not yet provided a comment on this latest purchase.
The transaction took place on June 22, with shares closing at $5.73 on the day. Lucid’s shares rose by 1.5% on Monday as the Nasdaq Composite fell 1.2% following Lucid’s announcement of a partnership with Aston Martin (AML.London). This collaboration involves Aston Martin purchasing products from Lucid, and in return, Lucid receives cash and stock.
Post-disclosure of this purchase, Lucid shares saw an additional rise of 3.1% in Monday’s after-hours trading.
Investors seem to welcome the inflow of additional capital for Lucid, even if it slightly dilutes existing shareholders’ stakes. Capital is essential for Lucid as it accelerates sales. Wall Street expects the company to utilize around $10 billion over the next four years before it begins generating free cash flow after reaching approximately $13 billion in annual sales. The projected sales for 2023 are roughly $1 billion.
This represents significant growth and a substantial cash influx. However, increased interest rates and burgeoning competition in the EV market have somewhat dampened investor enthusiasm for EV start-ups. Over the past 12 months, Lucid shares have declined by about 71%.