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. 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.
