Is Lucid Group (LCID) Making a Comeback?
Ah, Lucid Group (NASDAQ: LCID). What fond memories we have of this former SPAC stock. At the height of the EV frenzy, some suggested that Lucid would be the Tesla ($202.64|0.38%) killer. Don’t get me wrong the cars are beautiful and the technology is amazing. The only problem is, few consumers can afford to spend on Lucid’s high-end Air sedan. The EV maker has found itself lagging well behind its competitors and is nowhere near taking on Tesla despite the industry leader’s own recent struggles.
On Friday, shares of LCID unexpectedly surged higher by 45%. Many of us were brought back to the days of meme stock short squeezes when we saw the stock’s performance. What provided the stock with this sudden charge? A potential takeover by the company’s largest stakeholder: the Saudi Arabia Public Investment Fund.
Is Lucid Getting Acquired?
The Saudi Public Investment Fund or PIF already owns more than 65% of Lucid’s stock and just injected a further $915 million at the end of 2022. It’s not the first time the PIF has been linked to an American EV maker. In 2018, the PIF attempted to take Tesla private. The deal was so close that CEO Elon Musk tweeted that funding had been secured for the takeover. Ultimately the deal fell through and the PIF got involved with Lucid a couple of years later.
Let’s get one thing straight: everything is just a rumour right now. Nothing has officially been announced by either Lucid or the PIF. After shares shot up by 45%, the stock pared most of its gains midway through the day. Buy the rumour, sell the news!
No official word has come out of either party as of the time of this writing.
Lucid Stock Forecast 2023
Would it be a significant change for Lucid? That remains to be seen. The company was already planning to establish a production facility in the Middle East. If it were acquired by the PIF it could move most of its operations to that region. One would have to think that the PIF would want a say in changing the business operations of Lucid. The optimal change for Lucid shareholders would be to focus on more affordable EV models. Since the start of 2022, Lucid has only delivered a total of 4,369 vehicles. The company is making more cars than it can sell.
I have been quite vocal about my bearishness on Lucid in the past. I didn’t like the stock when it was trading in the $25.00 dollar range, and I still don’t like it now. There are so many other EV stocks I would rather own, Tesla and Nio (NYSE: NIO) being two of them. Even if Lucid can confirm that it is being acquired, I’m not sure if that would be great for the stock. I’ll be watching how this unfolds comfortably from the sidelines.