Lucid (NASDAQ:LCID) stock closed higher by 43% today following speculation that Saudi Arabia’s Public Investment Fund (PIF) would acquire the remainder of the company. A Schedule 13D filing submitted in December shows that the fund owns 1.1 billion shares in the electric vehicle (EV) company, equivalent to a 60.66% stake.
The speculation can be traced back to an “uncooked” alert from Betaville, a website that often publishes rumors of mergers and acquisitions. There’s also speculation that JPMorgan (NYSE:JPM) may be assisting with the acquisition plan, although nothing has been confirmed at this point. Ben Harrington, Betaville’s author, has over a decade of mergers and acquisitions reporting experience.
Back when Lucid was still a private entity, PIF invested more than $1 billion to help jumpstart the company’s prospects. Last April, Saudi Arabia also announced that it would purchase 50,000 Lucid EVs, with the option to purchase an additional 50,000 EVs, over the next 10 years.
In December, Lucid closed a $915 million private placement from Ayar Third Investment Company as well, a unit of PIF. As part of the agreement, PIF pledged to not sell or transfer any LCID stock for at least six months following the private placement.
If the speculation turns out to be true, Morgan Stanley analyst Adam Jonas would see his prediction play out. In October, Jonas noted the following:
“It is our working assumption that the relationship between the Kingdom of Saudi Arabia and Lucid could extend beyond a controlling shareholder status. In our opinion, the Public Investment Fund stake in LCID represents a ‘seat at the table’ for the energy transition story that aligns with the KSA’s long term economic and social reforms of Vision 2030.”
5 Investors Betting Big on LCID Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the third quarter, a total of 417 13F filers disclosed ownership of LCID stock, a decline of six filers from the prior quarter. Meanwhile, the institutional put/call ratio sits at 1.03, down from 1.11. That’s equivalent to 29.33 million puts and 28.35 million calls, implying a neutral options stance. With that in mind, let’s take a look at the top shareholders of Lucid as of Q3:
- Public Investment Fund: 1.1 billion shares.
- Vanguard: 51.58 million shares. Vanguard purchased 10.32 million shares during Q3.
- BlackRock (NYSE:BLK): 28.17 million shares. BlackRock purchased 1.02 million shares during Q3.
- State Street (NYSE:STT): 10.95 million shares. State Street purchased 129,252 shares during Q3.
- Geode Capital Management: 8.47 million shares. Geode purchased 235,830 shares during Q3.
On the date of publication, Eddie Pan did not hold (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.
