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Why Lucid Motors Is Moving Churchill Capital IV Stock Today

By Howard Smith - Feb 17, 2021 at 10:54AM

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The rumor of a combination between the EV maker and the SPAC appears closer to becoming fact.

What happened

Churchill Capital IV (CCIV) stock has been driven by electric vehicle (EV) maker Lucid Motors since early January when a Bloomberg report said the special purpose acquisition company (SPAC) was close to merging with Lucid. Churchill Capital IV stock has risen more than 300% since then. 

Today, shares of Churchill Capital were up another 9% before settling back to a 4% gain as of 11:15 a.m. EST. This comes a day after shares soared 32%.

So what

The most recent surge comes after Reuters reported that a deal valuing the combined company at $12 billion is nearing. Churchill Capital IV was formed by former Citigroup banker and Wall Street veteran Michael Klein. Reuters reported yesterday that Klein launched a new financing round to raise more than $1 billion for a deal with Lucid.

Lucid Air luxury electric sedans

Lucid Air luxury electric sedans. Image source: Lucid Motors.

Now what

The financing will be through a private investment in public equity (PIPE) transaction, and depending on demand, could be as much as $1.5 billion. Saudi Arabia's sovereign wealth fund invested more than $1 billion in Lucid in 2018, helping to fund the company's Arizona manufacturing facility. 

The first Lucid vehicles are expected to be available this spring, beginning with the $161,500 Air Dream Edition. There is much optimism for the future prospects of the electric car maker, but at today's share price, investors would be buying at a valuation greater than $60 billion if the reported details come to fruition. Buyers today need to be aware of this valuation level.

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