Lucid Motors has strategically partnered with Churchill Capital IV in an effort to go public. Sources close to the matter revealed that Churchill Capital IV plans to raise around $1B and the deal could be announced this month.
The luxury electric car maker Lucid Motors has been looking to go public. To achieve this, the automaker has partnered with Michael Klein’s blank-check acquisition firm Churchill Capital IV. Through this SPAC, Lucid can go public without much regulatory scrutiny and on a guaranteed valuation.
As one of a few Tesla competitors, the automaker has for some time been planning to go public to keep up with Tesla Inc (NASDAQ: TSLA) which has seen a stock implosion in recent months. Lucid has been attracted by the recent interest in electric cars with Tesla leading the way. An incredible rally that began in 2020 saw Tesla reach a valuation of $700B, more than Toyota and Volkswagen, both of which outperform Tesla in production and sales.
Investors who might have missed the Tesla boom could get a chance with Lucid. The electric automaker that was set up in 2007 by former Tesla executive Bernard Tse, has caught a big break and is set to go public with a valuation of around $12B.
Lucid Motors Big Move with SPAC Deal
Sources close to the deal have revealed that Churchill Capital IV, a special purpose acquisition company (SPAC) is throwing its support and is in talks with investors to raise $1 billion by selling shares in private investment in public equity (PIPE) for Lucid motors. However, Churchill Capital IV could raise up to $1.5B depending on investor demand.
The strategic partnership of companies and SPACs is not a foreign concept. Companies looking to go public without much scrutiny from regulators and seeking certainty in valuation have sought to use SPACs. It is especially not a new concept with electric car companies. In the past, Nikola and Fisker have gone the same route. It would however be the biggest deal if the Lucid motos and Churchill Capital IV joining was confirmed.
Already Churchill Capital is reaping big, seeing its stock shoot up by up to 300% since the reports. This in itself has been a major sign that Lucid motors is highly regarded by investors. If the same demand is reflected on Lucid motors upon its IPO, it should surpass the $12B valuations.
In regards to Nikola and Fisker, the two initially recorded big gains. However, only Fisker was able to sustain profits in the long term. For Lucid, it goes public at the most ideal time. There is a market rush with most stocks overperforming after a slump for the majority of 2020. With Tesla also seemingly having topped, Lucid could be flooded by investors who missed Tesla’s rise or taking profits from Tesla.