Editor’s note: This article was updated on May 21, 2021, to clarify the headline and language around the merger timeline.
Part of the negativity had to do with a general disinterest by investors for anything related to special purpose acquisition companies (SPACs). It didn’t matter if a company was a new SPAC, a SPAC with a merger partner like Lucid, or a company operating after a de-SPAC had taken place.
If a stock was born of SPAC lineage, it was essentially shunned by investors. It also didn’t help that Lucid and Churchill had very little to report. However, since the calendar turned to May, it’s had some announcements and news that’s worth evaluating.
I didn’t think CCIV stock could hold a candle to Tesla (NASDAQ:TSLA) at the time. CCIV and TSLA were down 18% and 19%, respectively, between April 27 and May 18. But it’s possible the latest updates could change my mind.
Here’s what’s new and relevant so far in May.
Lucid Snags a Quality CFO
On May 5, Lucid announced the appointment of Sherry House as its chief financial officer. She comes from Waymo, the self-driving business operated by Alphabet’s Google (NASDAQ:GOOG, NASDAQ:GOOGL). The executive’s worked in tech, private equity, and automotive. Not only does she have an MBA, but she also holds several advanced engineering degrees.
There is no question CEO Peter Rawlinson is building a quality management team. He said:
We stand on the cusp of delivering the world’s most advanced electric vehicles, and now with the arrival of Sherry, augmented by the ongoing, invaluable contribution of our Vice President of Finance, Mike Smuts, we continue to build out what I believe to be the EV industry’s strongest leadership team.
Not only did it snag House, but it also hired three other key executives as it prepares to deliver the Lucid Air to the more than 9,000 future customers with reservations.
CFOs are often overlooked in tech businesses. However, they are vital to the ongoing success of a growth business. House, along with Smuts, is charged with ensuring Lucid never runs out of capital. Everything else will figure itself out.
Other Details Worth Noting
As I mentioned, the company has more than 9,000 reservations. That’s up from 8,000 at the end of February. Those reservations have the potential to generate more than $800 million in revenue. Lucid also said in its Analyst Day presentation that the Lucid Air Dream edition, which can accelerate to 60 miles per hour in less than 2.5 seconds, is fully reserved.
You snooze, you lose, I guess.
In a nod to Tesla, Lucid is developing an energy storage system (ESS) for the home, commercial, and utility markets that will leverage its battery technologies to create economies of scale for future battery production at a much lower cost. To that end, it has an ESS prototype at the company’s headquarters in California that it’s testing.
As for the electric vehicle (EV) maker’s stores, it has six open in California and Florida, with nine others in development or under construction. Locations will include Boston, New York, Chicago and Phoenix. Having physical locations open is vital to growing the Lucid brand.
Most importantly, Lucid’s Arizona manufacturing plant is set to take off in the summer with estimated deliveries for 2021 of 1,000 vehicles. That’s up from a previous estimate of 577 by the end of the year. In 2022, it still expects to deliver 20,000 vehicles.
That’s about the extent of the changes since it announced its merger with Churchill Capital IV in February. It still plans to get to an annual production of 500,000 or more vehicles by 2030, giving it approximately 4% market share.
The Bottom Line on CCIV Stock
In April, I said Tesla was a better buy than CCIV. A few weeks later, while Lucid has made some promising hires, it’s not expected to complete its merger until sometime early in the third quarter, about the same time it starts delivering actual vehicles.
That likely means between now and then, the company will try to deliver drips of new information to keep investors engaged until Lucid stock is trading and vehicles have been delivered to customers with reservations.
Please don’t fall for it.
Until vehicles are on the road and its estimates appear achievable, CCIV stock will likely remain stalled under $20.
Will you be able to buy under $15? I doubt it.
If you want to buy, the floor doesn’t seem to be much lower than where it’s currently trading. While I wouldn’t buy it, that doesn’t mean you shouldn’t.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.