What happened
One of the hot rumors swirling around the stock market on Friday concerned a top U.S. electric vehicle (EV) stock, so many titles in the sector saw big lifts on the day. Nio (NIO 2.30%) and fellow Chinese next-generation car maker Xpeng (XPEV -3.37%) both closed more than 4% higher against the S&P 500 index's 0.3% bump. Shares of American EV company Rivian (RIVN 1.03%), meanwhile, booked an over 8% gain.
So what
Early Friday afternoon, market buzz grew about the possibility of the Saudi Public Investment Fund (PIF) buying out the minority portion of the Lucid (LCID 0.83%) stake it does not already own. This followed speculation published in Betaville, a website that purports to track hot news about notable, publicly traded companies.
Currently, the PIF holds a stake of over 65% in Lucid, a maker of high-end luxury EVs.
Neither the PIF nor Lucid has yet publicly commented on the speculation.
Regardless, the scuttlebutt put a real charge into the stocks of other EV companies. The thinking apparently went that if the very well capitalized PIF is considering a full Lucid buyout, it might be eager to get its hands on other companies in the sector too.
And although industry bellwether Tesla, with its nearly $562 billion market cap, is probably out of reach, major stakes in the smaller players are relatively affordable. Rivian's market cap stands at $17.5 billion; Nio's isn't drastically higher at $21.4 billion; and Xpeng's is barely over $9.1 billion.
Now what
This is an intriguing rumor and is surely worth watching as (and if) it develops over the next few trading days. But it's good to keep this in perspective; as of now, a rumor is all it is, and investors should take care not to trade purely using it as a justification.
