Lucid (NASDAQ:LCID) stock is up more than 2% today following the submission of a Form 4 from Saudi Arabia’s Public Investment Fund (PIF). The filing shows that PIF subsidiary Ayar Third Investment Company acquired 265.69 million shares of LCID stock at an average per share price of $6.83 in a private placement. In total, the purchase was worth over $1.8 billion. Following the transaction, PIF now owns a total of 1.37 billion shares, equivalent to a significant 60.5% majority ownership stake.
Shareholders shouldn’t be all too surprised with the purchase, as Lucid had previously announced it would enter into a private placement with PIF with an estimated completion date of June 26. The electric vehicle (EV) company announced the private placement simultaneously with its underwritten public offering of 173.54 million shares, which was expected to provide the firm with $1.2 billion in gross proceeds. The offering had an expected closing date of June 5.
Saudi Arabia’s PIF Acquires $1.8 Billion of LCID Stock
Lucid will use the proceeds from the offering and private placement for general corporate purposes, such as for capital expenditures and working capital. Ayar has also entered into a subscription agreement with Lucid that will bar it from selling, offering, pledging or transferring its Class A shares for six months following the transaction. Following the completion of the offering and private placement, there are now 2.27 billion shares of LCID outstanding.
PIF and Ayar may be buying the dip, as LCID stock has declined more than 65% over the past one year. The emerging EV company has a long history with PIF, which was an early investor. Back in 2018, PIF agreed to invest more than $1 billion into Lucid. Earlier this year, rumors also circulated that the government fund may be eyeing a buyout of the entire company.
During the first quarter, Lucid reported revenue of $149.4 million, below the analyst estimate for $209.9 million. EPS for the period was a loss of 43 cents as well, while Lucid’s net loss was $779.5 million. Revenue was attributed to the delivery of 1,406 vehicles, while the company produced 2,314 vehicles in Q1. For the year, Lucid set its 2023 production guidance to over 10,000 vehicles, which had been previously set to between 10,000 and 14,000 vehicles in February. At the time, CFO Sherry House said that Lucid’s cash balance of $3.4 billion would be adequate to sustain business operations until Q2 2024.
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.
