Lucid Motors, an electric vehicle startup, recently saw its stock plummet by more than 10% in after-hours trading. This drop followed the company’s announcement of a public offering of approximately 262.5 million shares of its common stock. The majority stockholder, Ayar Third Investment Co., which is an affiliate of Saudi Arabia’s Public Investment Fund, also plans to purchase over 374.7 million shares of common stock in a private placement alongside the public offering.
After these transactions, Ayar is expected to maintain around 58.8% ownership of Lucid’s outstanding common stock. The public offering is being underwritten solely by BofA Securities, with the option to purchase nearly 39.37 million additional shares of Lucid’s common stock.
The net proceeds from the public offering and the private placement will be used for general corporate purposes, such as capital expenditures and working capital. This move comes after Lucid secured $1.5 billion in cash from the PIF two months ago to expand its product line.
Despite these financial injections, Lucid has faced challenges with sales and financial performance. Higher costs, slower-than-expected demand for electric vehicles, and marketing issues have hindered the company’s growth. As a result, Lucid’s shares have fallen by 22% this year, with the stock closing at $3.28 per share on Wednesday, representing a market cap of $7.6 billion.
At the end of the second quarter, Lucid had $1.35 billion in cash and cash equivalents, slightly down from $1.37 billion at the end of 2023. These figures indicate that while Lucid has received significant funding, it continues to face obstacles in achieving its projected sales and financial targets. The company’s struggles underscore the challenges that electric vehicle startups encounter in a competitive market dominated by established players.
Despite the setbacks, Lucid remains optimistic about its future prospects and the potential of its innovative electric vehicle technology. The company’s focus on expanding its product line and addressing operational inefficiencies demonstrates its commitment to long-term growth and sustainability in the rapidly evolving electric vehicle industry. As Lucid navigates the complexities of the market, investors will be closely watching its performance and strategic initiatives to gauge its ability to overcome obstacles and emerge as a key player in the electric vehicle landscape.
