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Lucid (LCID) Share Price Plunged 13.4% on a $3Bn Capital Raise

Analyst Team trader
Updated 1 Jun 2023

The Lucid Group Inc (NASDAQ: LCID) share price fell 13.4% after announcing it was raising about $3.0 billion via a public and private offering of its common shares. The company intends to sell 173,544,948 shares of its common stock to the public while selling 265,693,703 shares of Lucid common stock in a private placement.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The new shares were offered to participating investors at a discounted price of $6.77 per share based on calculations from the figures provided by the company. The company intends to use the proceeds of the capital raise for general working capital purposes and capital expenditures.

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The capital raise will see Lucid Group raise $1.2 billion from the public while raising $1.8 billion from its majority shareholder Ayar Third Investment Company (Ayar), an affiliate of Saudi Arabia’s Public Investment Fund (PIF). The private placement is expected to close on June 26, 2023, once the public offering has closed. 

Earlier this month, Lucid Group posted a wider-than-expected loss as demand for its luxury electric vehicles (EVs) weakened amid the challenging economic environment that has hit all EV manufacturers led by industry-leader Tesla Inc. 

At the time, the company’s CEO, Peter Rawlinson, said: “We are on track to produce over 10,000 vehicles in 2023, with companywide initiatives ongoing that will enable Lucid to pivot to higher volumes as market conditions allow.”

According to its February guidance, the EV manufacturer expects to produce between 10,000 and 14,000 for the current year. As a result, the company reported a Q1 net loss of $779.5 million, or 43 cents per share, significantly higher than the $81.3 million or 5 cents per share loss recorded in Q1 2022 when it increased the Air's production. 

However, its quarterly revenues rose year-over-year to $149.4 million from $57.7 million. In addition, the company ended its first quarter with about $3.4 billion in cash, with the latest capital raise adding a solid buffer to its finances. 

The Ayar Group will remain the majority shareholder in Lucid Group with a 60.5% stake in the firm after the latest capital raise. 

*This is not investment advice. 

Lucid Group share price. 

The Lucid Group share price plunged 13.40% to trade at $6.72, from Wednesday’s closing price of $7.76.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.