Lucid Provides a Sobering Look Under the SPAC Hood
Investors who bought the rumor are selling on the news of Lucid’s merger with Michael Klein’s CCIV SPAC. With cash burn like this, that’s no surprise.
Nice looking but hungry for cash.
Source: LucidLucid Motors Inc.’s plan to go public by merging with Michael Klein’s special purpose acquisition company, Churchill Capital Corp. IV, was a poorly kept corporate secret. Bloomberg first reported on the talks about six weeks ago. And yet, the luxury electric-car start-up still delivered a few surprises when the $11.75 billion transaction was announced on Monday. Not all of them were pleasant.3
Amateur investors have crowded into Klein’s SPAC in the hope of backing the next Tesla Inc. They did so before knowing the terms of the proposed transaction or the state of Lucid’s finances. Gambling doesn’t always pay. Investors who bought the rumor are now selling on the news. CCIV shares fell 36% in pre-market trading on Tuesday, though that still implies a valuation of almost $60 billion for Lucid, higher than Ford Motor Co.’s.5