Lucid Motors IPO Valuation: The Joke’s on CCIV Shareholders

Yesterday, Churchill Capital (NYSE:CCIV), which is set to close its merger with electric vehicle (EV) manufacturer Lucid Motors next month, filed an updated S-4/A with the Securities and Exchange Commission. The merger and IPO transaction currently values Lucid Motors at around $38 billion. CCIV stock is down nearly 4% today on the news.

Exterior of Lucid Motors building

Source: gg5795 /

While Lucid’s valuation falls short of the previous $42 billion estimate, it’s still aggressive by any measure. As a comparison, at an implied $38 billion, Lucid would trade at the same market capitalization as Tesla (NASDAQ:TSLA) in early 2017

But there’s another wrench in Lucid’s numbers, so to speak. Lucid’s final valuation will depend on what portion of Lucid’s PIPE investors cash in on redemptions. The PIPE priced at $15 — a roughly 60% discount to CCIV’s current $24 share price. With the lockup expiring in September, there’s a high likelihood that these short-term insiders take their profits. And that’s another reason for downside in CCIV stock.

Here’s a closer look.

CCIV Stock: Steep Valuation Shatters the Momentum Rally  

CCIV shareholders will have to decide for themselves whether a pre-production EV manufacturer garnering a $38 billion valuation is really worth it. Compared to the $70 billion figure suggested for Rivian Automotive, Lucid looks like a steal. But that’s comparing one pre-revenue, pre-IPO company to another pre-revenue, pre-IPO company. Here’s more real world context. Lucid’s traditional auto counterparts Ford (NYSE:F) and General Motors (NYSE:GM) are worth $62 billion and $93 billion, respectively. As mentioned earlier, at these prices, Lucid would be valued at the same market capitalization as Tesla in early 2017

Investors who may be spooked about CCIV’s lofty valuation should also remember that there’s no upcoming catalyst for the shares other than the transaction itself. After all, Lucid hasn’t affirmed previous production guidance for next year. Lucid also comes to market amid a backdrop of overpromising and under-delivering EV SPACs. At a quick glance, the growing list of soon-to-be out-of-businesses includes once-popular EV truckmakers Lordstown Motors (NASDAQ:RIDE) and Nikola (NASDAQ:NKLA). Both of these companies are currently under SEC investigation.  

A mix of bubble-like valuation, momentum and high short interest, at 26% of float — I think this is the end of the recent momentum rally in CCIV stock.

Pumpers Still Peddling Stale Drama Over Plaid+  

Meanwhile, social chatter from retail investor bulls remains obsessed with the idea that the sudden cancellation of Tesla’s uber premium Model S Plaid+ edition is a big coup because it’s now the only sedan on the market with a range of more than 500 miles on a single charge. But the market doesn’t really care. This is especially true considering that most Americans only drive about 30 miles per day on average.

Demand for Tesla’s vehicles continues to accelerate with only a moderate range of approximately 275 to 300 miles per charge. Ultimately, none of this even matters considering Lucid still can’t commit to a production output of 22,000 EVs for next year.

Plenty of Time to Buy After CCIV Stock Resets   

With EVs well-positioned to cannibalize a $5 trillion automobile market, there’s very little debate over long-term industry growth. That said, it’s too early to take a position in CCIV at these levels. Building vehicles is a rough business. Getting the manufacturing process right (and delivering products on time) will take more than cool design renderings. 

I expect CCIV to move sideways into the IPO transaction. Ultimately, EV valuations will reset. But, for now, there is plenty of risk to CCIV shares as investors begin to more closely scrutinize Lucid’s manufacturing ramp. As such, I continue to recommend selling CCIV shares. 

Your comments and feedback are always welcome. Let’s continue the discussion. Email me at

On the date of publication, Joanna Makris 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 Publishing Guidelines.

Joanna Makris is a Market Analyst at A strategic thinker and fundamental public equity investor, Joanna leverages over 20 years of experience on Wall Street covering various segments of the Technology, Media, and Telecom sectors at several global investment banks, including Mizuho Securities and Canaccord Genuity.

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