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Lucid Group Rally on Heavy Volume After Majority Shareholders Invest $1 Billion

March 25, 2024
minute read

Lucid Group Inc.'s stock surged by 16% on Monday following the announcement from the electric vehicle manufacturer that its majority stockholder is set to purchase $1 billion worth of its stock, a move that stands out amidst challenges faced by other EV companies.

Lucid Group (LCID) disclosed that Ayar Third Investment Co., based in Saudi Arabia and affiliated with the Public Investment Fund, the Saudi sovereign wealth fund, has agreed to acquire $1 billion worth of a new series of convertible preferred stock through a private placement, subject to customary closing conditions.

During early trading, Lucid's stock witnessed robust activity with nearly 8 million shares changing hands. This figure contrasts with its average daily volume over a 65-day period, which stands at approximately 36 million shares.

According to the company, the proceeds from the private placement will be utilized for general corporate purposes, including but not limited to capital expenditures and working capital.

Lucid Group, headquartered in Newark, California, is gearing up for the launch of its Gravity sport-utility vehicle later this year.

Despite this positive development, Lucid Group's stock has experienced a decline of approximately 25% since the beginning of 2024, reflecting a cooling interest in electric vehicles recently.

Mizuho downgraded Tesla Inc. (TSLA), Nio Inc. (NIO), and Rivian Automotive Inc. (RIVN) on Monday, citing weaker demand for EVs and downward pressure on prices.

In contrast, Fisker Inc.'s stock (FSR) saw a modest increase of 1% despite the EV maker's acknowledgment that negotiations with an undisclosed car manufacturer had reached an impasse.

Eric Ng
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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