LCID: Lucid Stock Crashes 12% as Luxury EV Maker Plans to Sell 262 Million Shares

New initiative will dilute shares in circulation as Lucid expects to pick up about $860 million at current market prices.

• Lucid Group LCID, the Saudi-owned luxury EV maker, tumbled more than 12% in after-hours trading Wednesday following an announcement that had investors scrambling for the exits. The company said it is planning to release 262.5 million shares for a public offering as a way to get more cash that would help for “general corporate purposes, which may include, among other things, capital expenditures and working capital.”
• Investors never really like this news — more shares coming into circulation dilute the value of the existing shares. On the flip side, Saudi Arabia’s Public Investment Fund (PIF), which owns roughly 60% of Lucid, has said it will purchase more than 374.7 million shares of common stock in a “private placement concurrently with the public offering.” In other words, PIF is getting ready to inject some $1.2 billion in Lucid at current market prices.
• Lucid is one of the rare non-oil picks for the Saudi government, which runs the economy mainly on oil and generates huge amounts of profits from oil-related products. But Lucid is far from making good on PIF’s bet. The company has devoured billions from the Saudi government, hasn’t been profitable and is every now and then looking for fresh cash to continue operations. For this quarter, Lucid is expected to post a $790 million operational loss. Shares are down 67% since flotation and 95% from their 2021 peak.