Why Churchill Capital IV Stock Soared This Week

What happened

Shares of Churchill Capital IV (NYSE:CCIV) enjoyed a strong rally this week, gaining as much as 18% week to date by Thursday morning. Churchill Capital IV is the special purpose acquisition company (SPAC) that is taking Lucid Motors public. As of 2 p.m. EDT on Thursday, the stock was up 9% for the week.

So what

Investor sentiment around electric vehicle (EV) stocks has been weak in recent months, much like it has for other speculative growth companies. Investors appear to be warming back up to EV stocks, as many other companies in the sector have also climbed this week. Ahead of the launch of the Lucid Air sedan, the company has been ramping up its media appearances to raise awareness of the flagship vehicle and potentially contribute to new reservations.

Lucid Air chassis being painted in the factory

Image source: Lucid Motors.

Business-focused website Inc. published an article last weekend that called the Air the car that Tesla CEO Elon Musk “should be most worried about” after tech columnist Jason Aten took a test ride. Lucid also took Yahoo! Finance reporter Pras Subramanian on a ride. In a follow-up interview with that outlet, CEO Peter Rawlinson confirmed that reservation growth is accelerating as the company opens more retail locations to showcase the Air, and framed the technological competition with EV leader Tesla as a “two-horse race.” Lucid currently has over 10,000 total reservations.

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Now what

Last week, Churchill Capital IV announced the SEC had declared its registration statement Form S-4 to be effective, with the SPAC scheduling the special meeting of shareholders for July 22. Investors will vote on the proposed merger at the meeting, and the transaction will close the following day if shareholders collectively give their blessing.

Lucid had initially expected the deal to close in the second quarter but recently delayed it into the third quarter. Once the transaction closes, Lucid will receive an estimated $4.5 billion in cash to use for its future growth plans. The company is preparing to start delivering Air cars in the second half of the year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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View more information: https://www.fool.com/investing/2021/07/01/why-churchill-capital-iv-stock-soared-this-week/

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