Today, early stage EV stocks are getting a nice boost from Mr. Market. Investors in Churchill Capital (NYSE:CCIV) and CCIV stock are seeing gains of more than 8% at the time of writing, on an otherwise flat day.
Today’s enthusiasm for hypergrowth EV stocks comes amid otherwise bearish sentiment for the sector. EV plays such as Lucid Motors, the company coming public via a reverse merger with Churchill Capital, have been beaten down pretty hard of late.
A series of headwinds are at play for CCIV stock right now. Among these, a global chip shortage threatens to put a cap on growth for EV stock over the medium term. Indeed, with substantial growth priced into Lucid’s valuation, investors are pricing in little wiggle room for growth downgrades. Accordingly, after hitting a high of nearly $65 per share earlier this year, Churchill stock closed last week below $20 per share.
However, for some hypergrowth investors, this discount is simply too juicy to ignore right now. And today, Lucid’s valuation relative to its peers is coming into focus.
Let’s dive into the key news item that’s driving shares of Churchill higher today.
CCIV Stock Climbing on Rivian IPO News
Today, reports indicated that Rivian, the Amazon-backed EV truck maker, could be going public soon. The proposed valuation? Approximately $50 billion to $70 billion, according to varying sources.
If Rivian is able to generate such a valuation in the market, Churchill Capital’s current market cap of $5.5 billion certainly looks cheap. Plus, as of April 2021, experts were eyeing a roughly $35 billion value after the merger. And perspective is everything these days.
Now, Rivian was successful in raising $2.65 billion in a capital round sponsored by Amazon, Fidelity and T. Rowe Price earlier this year. Accordingly, there’s room for a valuation bump, should the company indeed pursue an IPO at some point this year. Given the big money interests involved in this name, this speculation appears to be based in reality.
$CCIV goes up due to investors realizing it’s a MASSIVE bargain compared to Rivian.
This is something we all knew and pointed out months ago 😂 Thanks for the cheap shares!
— Lucid Motors Investors Club (@LucidInvestClub) June 1, 2021
Bullish warriors for CCIV stock have taken to social media today to highlight the valuation of what will be Lucid Motors. Indeed, time will tell how speculative EV stocks perform from here. However, over the near term, it appears there’s room to be bullish.
On the date of publication, Chris MacDonald 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.
