The recent surge in Lucid Group's (NASDAQ: LCID) shares is nothing short of electrifying. The stock shot up 43% on Friday, after market speculation that Saudi Arabia's Public Investment Fund (PIF) was looking to buy out the electric vehicle maker. I can't blame investors for getting excited - when you hear rumors that a sovereign wealth fund is looking to take over your stock, it's bound to get your heart racing.
But before we all start throwing our money at Lucid, it's important to remember that this is all just speculation at this point. The "uncooked" alert that originated the rumor came from deals website Betaville, which is known for its market gossip. Lucid and PIF have both declined to comment, and let's be honest, it wouldn't be the first time a rumored deal fell through. In 2018, PIF was reportedly interested in taking Tesla private, but that deal never materialized.
Furthermore, Lucid has had its fair share of struggles recently. The company has been struggling to deliver its sleek Air luxury EVs after delivering only 4,369 vehicles last year. And with Tesla cutting prices, it's going to be tough for money-losing startups like Lucid to grab a share of the market in an industry that's already competing for shrinking consumer wallets.
But here's the thing, while Lucid may have its challenges, it's important to remember that this is still a company with a lot of potential. PIF first invested $1.3 billion in Lucid in 2018, and now owns around 65% of the shares. And let's not forget, short sellers dealt a mark-to-market loss of $685 million with Lucid's shares spike on Friday. That's a pretty strong signal that there's something worth watching here.
So, while it's important to approach this rumor with a healthy dose of skepticism, it's also worth keeping an eye on Lucid. There's a lot of speculation and uncertainty right now, but as the old saying goes, where there's smoke, there's usually fire. And with Lucid, there's definitely smoke.