Lucid (LCID +5.33%) stock closed out Tuesday's trading with big gains. The electric vehicles (EV) company's share price gained 5.3% in a session that saw the S&P 500 fall 0.7% and the Nasdaq Composite decline 0.6%. The stock had been up as much as 13.9% at one point in the day's trading.
Lucid shares moved higher today on a recent disclosure that Uber holds a larger-than-expected share in the company. Even with today's pop, the stock is down roughly 33% year to date.
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Lucid stock soared on Uber stake news
A recent filing from Uber with the Securities and Exchange Commission (SEC) revealed that the company owned 37.7 million shares of Lucid's class A common stock. The holding works out to a roughly 11.5% ownership stake in Lucid. With Uber's position signaling a major vote of confidence in Lucid, investors bought into the EV player's stock today.
NASDAQ: LCID
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What's next for Lucid?
Uber and Lucid had already announced a partnership to incorporate the EV upstart's vehicles into the ride-hailing specialist's robotaxi fleet, and the team-up has the potential to be a significant long-term catalyst for Lucid stock. On the other hand, investing in the EV player remains a very risky proposition.
Lucid has been racking up big losses with each new quarterly report, and the company has been relying on selling new stock in order to fund its operations. News that Uber has been ramping up its ownership stake in the company is a positive development because it suggests some diversification in Lucid's shareholder base, but Saudi Arabia's Public Investment Fund (PIF) continues to be the EV company's largest shareholder by far, and the likelihood of continued stock dilution is a dynamic that potential investors have to consider.
