Lucid sells off common stock to raise capital
On top of the more than 262 million shares on public offer, Lucid’s majority stockholder, the Saudi Arabian Public Investment Fund (PIF), announced that it would purchase an additional 374,717,927 shares of common stock from Lucid. Specifically, the shares will be acquired by PIF subsidiary Ayar Third Investment Company, who will then maintain its approximately 58.8% ownership of Lucid’s outstanding common stock. “In addition, Ayar has indicated that they intend to purchase from us, in the event that the underwriter exercises its option, additional shares of our common stock to maintain its ownership of Lucid’s outstanding common stock,” the carmaker specifies. The underwriter has been granted a 30-day option to purchase up to 39,367,040 additional shares of its common stock.
All this comes amid possible worse-than-anticipated Q3 results. While the data has not been officially communicated, Reuters reports that Lucid expects losses “in the range of $765 million to $790 million” in the last quarter. Analysts had previously estimated losses amounting to $751.65 million.
So far, the US manufacturer has only published its production and delivery figures. While Lucid delivered 387 more units in the third than in the second quarter, production was down. Moreover, to reach its targeted production of 9,000 EVs for the whole of 2024, Lucid would have to build more than 3,000 electric cars in the last three months of the year. Considering that about 1,805 units rolled off the production line from July to the end of September, that seems very unlikely.
The money from its stockholders is thus desperately needed. Lucid says it will use the net proceeds from the public offering and the investment by Ayar “for general corporate purposes, which may include, among other things, capital expenditures and working capital.”
About two months ago, Ayar injected 1.5 billion dollars into Lucid Motors, which the carmaker said were sufficient funds until the end of 2025. It was already its second investment, after buying one billion dollars of newly created series of convertible preferred stock via private placement in March of this year. This time, Ayar Third Investment will buy 750 million dollars worth of convertible preferred stock and provide a similar amount as a credit line.
The public offering announcement sent Lucid’s shares down 12% in after-market trading on Wednesday. Overall, shares of Lucid have fallen 22% this year.
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