It’s fair to say that the business combination between special purpose acquisition company (SPAC) Churchill Capital IV (NYSE:CCIV) and luxury electric vehicle maker Lucid Motors got investors excited back in January. Indeed, CCIV stock flew like an eagle – but then landed like a rock.
Some folks might point to Lucid Motors as a poster child of SPAC and electric vehicle market hype. I understand where the skeptics are coming from, believe me.
I, too, tend to be wary of hype and bubbles. Yet, Lucid Motors isn’t a typical electric vehicle manufacturer, and the hype might actually be justified.
Besides, the share price was already beaten down and now seems poised for a comeback. And in fact, there may be a major catalyst in the works, in the form of a possible connection with a very well-known tech titan.
A Closer Look at CCIV Stock
Apr. 26, 2021 was a great day for CCIV stockholders as the share price gained 16.16%, settling at $23.87.\
What could possibly have caused the stock price to move upwards in such a dramatic fashion? Don’t worry – we’ll get to that in a moment.
For now, I would just say that it’s a step in the right direction as the CCIV stock bulls really needed a boost.
It was amazing and horrendous, witnessing the stock price go from $10 in January to a 52-week high of $64.86 in February, and then back down to the low $20’s just a couple of months later.
Even for the folks who bought near the top, I wouldn’t give up hope. There may be something brewing that could galvanize the shareholders and send the stock right back to the top.
Biting into the Apple Rumors
Okay, so I won’t keep you waiting any longer. The reason why CCIV stock popped recently is because there are rumors circulating that Lucid Motors is in partnership talks with Apple (NASDAQ:AAPL).
I didn’t see anything about on Lucid’s website, but thank goodness I regularly check with my colleagues at InvestorPlace for updates on events like this.
For instance, contributor Chris MacDonald pointed me to a report from Wccftech which may have fanned the flames of the rumor mill.
This, I believe, is the key paragraph which might have gotten the social media pundits all worked up:
“The fact that [Lucid Motors CEO Peter] Rawlinson did not explicitly deny any contact between Lucid Motors and Apple over a potential partnership is very significant.”
It’s hard enough to analyze a CEO’s comment; how can we analyze the lack of a comment?
Yet, I see the point here. If there truly was zero chance of a partnership with Apple, then Rawlinson probably would have said so by now.
Better Reasons to Buy
To loosely quote InvestorPlace contributor Luke Lango, in business speak, declining to comment usually means “yes.”
Moreover, as Lango points out, former Apple Chief Designer Jony Ive is on Lucid’s board.
So, it’s not unreasonable to conclude that an Apple deal might be in the works. But, does it make sense to buy or hold CCIV stock solely based on that possibility?
I’ve got a better idea. How about owning the shares because Lucid Motors is preparing to commence production of the Lucid Air in the second half of 2021?
Or maybe, you could buy the stock because Lucid sold out every available reservation for its Air sedan in Dream Edition trim. Amazingly, that edition is priced at around $170,000 (minus rebates and plus options).
Finally, you can hold Churchill Capital IV shares because you feel that the stock has been beaten down far enough, and a turnaround is overdue.
The Bottom Line
It’s fun to swim in the pool of rumors – no doubt about it. However, that might not be a firm basis for investing your hard-earned capital.
Thankfully, there are reasons to own CCIV stock outside of the Apple rumors. And if the Apple partnership is real, that’s one heck of a nice bonus.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.