Lucid Motors CEO Peter Rawlinson discussed the company’s decision to raise approximately $1.75 billion through a public offering, a move that led to an 18% drop in the company’s stock—the worst performance since December 2021. Rawlinson described the issuance of nearly 262.5 million shares as a strategic decision to secure the electric vehicle maker’s capital needs through 2026, amid heavy investments in expanding production facilities in Arizona and Saudi Arabia, and developing new models like the Gravity SUV and an advanced powertrain. Rawlinson emphasized that this funding round was well-planned and necessary to avoid a “going concern” disclosure.
However, market analysts criticized the timing and necessity of the raise. Despite having over $5 billion in liquidity at the end of Q3, the move raised questions about why additional capital was sought soon after a $1.5 billion investment from Saudi Arabia’s Public Investment Fund (PIF). Wall Street analysts perceived the raise as premature, considering the potential dilution of shares at a time when Lucid’s stock price is already depressed.
The stock offering was accompanied by a transaction in which Lucid’s major stakeholder, Ayar Third Investment Co., an affiliate of the PIF, planned to purchase over 374.7 million shares to maintain its 59% ownership. While some investors worried about dilution, Rawlinson framed the PIF’s ongoing support as a positive signal of confidence in Lucid’s future.
The company recently announced record deliveries of its Air sedan and aims to produce 9,000 vehicles this year, but challenges linger due to high costs, slower EV demand, and marketing issues. Rawlinson maintained that the capital raise was in alignment with Lucid’s long-term strategy and should have been anticipated.
Original Story https://www.cnbc.com/2024/10/21/lucid-ceo-wall-street-capital-raise.html
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