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. 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.
