It was a bad day for fans of Churchill Capital IV (NYSE:CCIV). Just yesterday, investors sent CCIV stock up past $30 on hopes for a Lucid Motors SPAC merger. Today, however, an expectation-tempering report from the Wall Street Journal sent shares falling right back down. So what do you need to know right now?
The story here with CCIV stock is simple, although it comes with powerful twists and turns. Bloomberg reported at the beginning of January that the special purpose acquisition company was in talks to bring Lucid Motors public. Even without merger confirmation, CCIV stock has gained more than 200% since then. Why? Investors are confident that such a SPAC merger will come to fruition, and they want in as soon as possible.
Writing for the Wall Street Journal, Eliot Brown dashed those hopes today. He said that Churchill Capital IV is an example of market “frothiness.” He also said that according to people close to the matter, a Lucid Motors SPAC merger announcement is not “imminent.”
Following up sky-high gains on Tuesday, the Journal article carried incredible influence. CCIV stock closed out Wednesday down by 8.3% on heavy trading volume. More than 80 million shares traded hands today, while the average volume is just over 20 million shares.
So what should you do with this report swirling?
CCIV Stock and the Coveted Lucid Motors SPAC Merger
There are two takeaways from Brown that investors should keep in mind today. The first is that accusations of frothiness are perhaps not unfair. Churchill Capital shares truly stand out for their pre-merger gains, especially since the company has not confirmed a merger target. Beyond that, Lucid Motors is not the first rumored target for CCIV. Back in December, Churchill made an offer to acquire DirecTV. This serves as evidence of just how fickle SPAC merger deals can be.
However, the second takeaway is that not all hope is lost. Brown affirmed that talks between Churchill Capital and Lucid Motors are still underway. For investors, that means it may just be a waiting game with CCIV stock. If you are willing to wait, nothing here says a merger will not happen. Plus, as Will Ashworth wrote for InvestorPlace, CCIV is appealing even without a Lucid Motors deal.
Continue to keep an eye on CCIV and Lucid Motors — this story is going to evolve faster than the flagship Air EV.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.