After a week that took some stock market benchmarks to all-time highs, Wall Street looked ready to start the new week on a positive note yet again. As of 8:15 a.m., futures contracts on the Dow Jones Industrial Average (^DJI) were up 23 points to 35,990. S&P 500 (^GSPC -0.16%) futures rose 10 points to 4,721, and the Nasdaq Composite (^IXIC) saw its futures contracts gain 58 points to 16,387.
Electric vehicle stocks have been seeing a lot of volatility lately, but Monday brought some good news for Lucid Group (LCID -7.25%) that helped send its shares higher. However, one stock saw truly massive gains after a piece of news that was largely unanticipated. Below, we'll go into why Lucid is on the rise and then reveal which stock is seeing massive gains Monday morning.
Lucid joins the fast lane
Shares of Lucid Group were up more than 6% in premarket trading Monday morning. The EV specialist got a mark of distinction that should help it maintain its disruptive reputation for years to come.
The group that manages the Nasdaq-100 index released its annual list of changes to the benchmark, reflecting the changes in market capitalizations of its component stocks over the past year. Lucid Group was among six stocks that will become part of the Nasdaq-100. The changes will be effective immediately before the stock market opens next Monday, Dec. 20.
Indeed, it might have been in anticipation of that decision from the Nasdaq that there was a wave of interest in Lucid's offering of convertible debt. The company offered $1.75 billion to institutional investors late last week and was able to set the conversion price at which bondholders can trade their bonds for stock fully 50% higher than its Dec. 9 close. That means there shouldn't be any dilution for shareholders until the stock price reaches nearly $55 per share.
Lucid has a ton of potential going forward, and it will be able to make good use of capital to help it make good on its promise. Investors have to be pleased at the vote of confidence from investors, and joining the Nasdaq-100 will only increase Lucid's visibility in the investing community.
A big buy boosts this biotech
However, the true winner in the stock market Monday morning was Arena Pharmaceuticals (ARNA). The biotech company got its big boost because of an acquisition bid from a much larger industry peer.
Pfizer (PFE -0.57%) announced that it will acquire Arena in a deal worth $6.7 billion. Under the terms of the agreement, Pfizer will pay $100 per share for the company, more than double the closing price as of Dec. 10.
The motivation for the acquisition is similar to what investors have seen across the biopharmaceutical space. Arena has a stable of promising treatments that are still in the clinical trial stage, with no revenue to speak of over the past two years. Meanwhile, Pfizer has plenty of financial resources but needs to keep building its pipeline in order to make up for lost sales from older treatments that are losing their patent protection and seeing competition from generic drugmakers.
For shareholders, the acquisition would end a tough period during which Arena shares had fallen more than 40% since late 2020. Going forward, though, it'll be Pfizer that gets all the potential upside if Arena's treatment candidates turn out to be game changers in the biopharma industry.