Please ensure Javascript is enabled for purposes of website accessibility

Why Churchill Capital IV Stock Jumped Monday

By Howard Smith - Feb 22, 2021 at 9:57AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The SPAC may only be a day away from announcing its long-rumored merger with Lucid Motors.

What happened

Shares of much-discussed blank check company Churchill Capital IV (CCIV) jumped Monday morning after Bloomberg reported over the weekend that the anticipated merger with luxury electric vehicle (EV) maker Lucid Motors could happen tomorrow. 

Shares traded up almost 20% at the market open on Monday, and remained 17% higher as of 9:40 a.m. EST. 

So what

The news service reported Saturday that the deal between the special purpose acquisition company (SPAC) and Lucid could come as early as Tuesday. Bloomberg first reported the possible deal in early January, and it maintains that a combination could result in a combined entity being valued at up to $15 billion under the deal's terms. 

Lucid Air luxury electric sedan parked in front of building

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

Now what

Churchill Capital IV is led by Wall Street veteran banker Michael Klein. Last week, Reuters reported that Klein launched a new financing round to raise more than $1 billion for a deal with Lucid.

Lucid is one of the more well-known EV makers not yet trading publicly. CEO Peter Rawlinson was chief engineer for Tesla and its Model S development. Lucid says its Air luxury sedan will be available with over 1,000 horsepower and a battery range of 517 miles. The Model S maximum battery range is 402 miles. 

Investors jumping in as the price of Churchill Capital IV shares have soared more than 500% year to date should realize that valuation of the deal will be based on a $10 share price. With today's share price over $62, a post-merger valuation won't be far from approaching the $100 billion level. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Churchill Capital Corp IV Stock Quote
Churchill Capital Corp IV
Tesla, Inc. Stock Quote
Tesla, Inc.
$707.73 (7.43%) $48.93

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.