LCID Stock Alert: Is Saudi Arabia About to Take Over Lucid Motors?
Shares of Lucid 
LCID have spiked higher following speculation of an acquisition by dealmaker website Betaville. The website has released an “uncooked” alert that notes Saudi Arabia’s Public Investment Fund (PIF) may seek to purchase the remainder of Lucid. The fund already owns a 60.66% stake in the electric vehicle (EV) company as of Dec., equivalent to 1.1 billion shares. There is also speculation that PIF may be working with JP Morgan 
JPM on details concerning the deal, although nothing has been confirmed yet.
Shares of LCID stock were halted following the news, although trading has now resumed. The halt was attributed to reason code LUDP, which is reserved for stocks that experience volatile moves.
LCID Stock Jumps on PIF Takeover Speculation
Lucid and PIF have a long history. In 2018, before Lucid was a publicly traded entity, the fund agreed to invest over $1 billion in the company. The investment will work towards the Vision 2030 plan, which seeks to diversify Saudi Arabia’s concentration on fossil fuels.
Last April, Saudi Arabia announced it would purchase 50,000 of Lucid’s EVs over the next decade, with an option to purchase an additional 50,000 vehicles. These EVs will include the Air as well as upcoming vehicles like the Gravity SUV. Under the agreement, Saudi Arabia will purchase around 1,000 to 2,000 vehicles per year before ramping up to 4,000 to 7,000 vehicles beginning in 2025. Delivery of the first batch of vehicles will begin by the second quarter of this year.
In November 2022, Lucid announced it had inked a stock purchase deal with Ayar Third Investment Company, a subsidiary of PIF. Ayar agreed to purchase up to $915 million worth of common stock in at least one private placement through at least March 31, 2023. The transaction was closed in Dec.
The deal also noted Ayar would have the right, but not the obligation, to “enter into a subscription agreement substantially consistent with the existing agreement in respect of any increase to the maximum offering amount under the equity distribution agreement and/or any new at-the-market offering of the Company’s common stock during the term of the existing agreement.”
PIF certainly has the capacity to acquire the rest of Lucid. As of the end of 2021, it had over $500 billion in assets under management.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.
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