Why SPAC Churchill Capital IV’s Stock Is Higher Today

What happened

Shares of Churchill Capital IV (NYSE:CCIV.U) were trading higher on Tuesday, a day after Bloomberg reported that the special-purpose acquisition company (SPAC) is close to a deal to take electric-vehicle maker Lucid Motors public. 

As of 2:15 p.m. EST, the SPAC’s shares were up about 10.8%.

So what

Bloomberg reported on Monday that Churchill, a SPAC formed by former Citigroup executive Michael Klein, is close to a deal to take Lucid Motors public at a valuation around $15 billion.

Lucid Motors is aiming to enter the market for luxury electric vehicles at a price point a bit higher than Tesla‘s premium offerings. The company’s first model, a sedan called the Air, was designed by a team led by Peter Rawlinson, who had been the chief engineer on Tesla’s groundbreaking Model S. A second model, an SUV, is under development. 

A white Lucid Air, an electric luxury sedan.

Lucid plans to begin shipping its first model, the Air, this spring. Image source: Lucid Motors.

During a 2017 interview, Rawlinson (now Lucid’s CEO) told me that he thinks of the Air, which will start around $80,000, as the Model S’s successor — a car that builds on the lessons learned in Tesla’s early days. The Air will be available with up to 521 miles of EPA-rated range and, in $169,000 top trim, over 1,000 horsepower.

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Now what

Lucid has been moving steadily to get the Air to market since revealing a prototype in 2016. The company secured $1 billion from Saudi Arabia’s sovereign wealth fund in September 2018. It began construction of a factory in Arizona soon after. 

That factory is now nearly complete, and Lucid expects to begin shipping the Air this spring.  It’s not clear why Lucid is considering a SPAC deal to raise additional capital right now; auto investors who have been hoping to invest in Lucid at some point will have to wait until the deal is officially announced — assuming that it happens — to learn more.

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.


View more information: https://www.fool.com/investing/2021/01/12/why-spac-churchill-capital-ivs-stock-is-higher-tod/

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