Churchill Capital Corp IV (NYSE: CCIV) stock surged almost 80% last week after rumours broke the company is in talks of a merger. The SPAC is in apparent talks with Lucid Motors, a private EV manufacturer from California. Lucid Motors has made a name for itself on Wallstreet after its made its ambitions clear to take on Tesla. In addition, Lucid Motors CEO Peter Rawlinson had spent time as an engineering executive at Tesla prior to launching Lucid Motors. With so much speculation surrounding CCIV stock, this article will breakdown everything you need to know about the rumoured merger.
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Key details surrounding rumoured merger
- Bloomberg initially released an article last week stating Lucid Motors was currently in talks with CCIV in regards to a potential merger. However, this release is yet to be confirmed by Lucid Motors or CCIV.
- CCIV released a statement today neither confirming or denying the merger rumours. See full statement here.
- The merger is speculated to be worth up to $15 Billion according to Bloomberg.
- The report also notes the connection between Lucid Motors relationship with the Saudi Arabian sovereign wealth fund (PIF). Micheal Klein, owner of the SPAC CCIV also has connections with the PIF and the dots were aligned.
Why the rumoured Lucid Motors merger is a big deal
Firstly, it is clear to see why this merger is making so much noise on Wallstreet. Investors are very excited at the prospect of the potential merger and the dividends it could pay if delivered. The big selling point is that Lucid are in the process of preparing deliveries. The EV model “Air” is set to begin deliveries in early 2021. The EV model boasts horse power up to 1080hp and can reach 0-60 mp/h in 2.5 seconds. It is clear Lucid Motors are challenging Tesla in the luxury EV department, similar to the Tesla S models.
The SPAC merger will provide Lucid Motors with the much needed capital to expand on manufacturing and development. Unlike many other SPAC mergers, Lucid Motors can provide investors the peace of mind that deliveries are on the horizon in 2021. This translates to revenue, of which dictates the longevity of emerging EV innovators. With deliveries around the corner, the company can then begin to focus on vehicle sales margins and delivery growth.
The vehicles will be manufactured in their $700 million facility. The vehicle production capacity will initially be 34,000 units. According to CNBC, “Rawlinson believes the capacity to grow to 400,000 units by the end of the decade.” Rawlinson also added he plans to have 1 million vehicles produced by 2027.
Before I begin, I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.
In conclusion, although only a rumour at this stage – the market has already priced in the potential of this merger. In addition, the spike in interest can also attribute greater risk of volatility. With no concrete evidence to confirm this merger, the risks at the current price are mounting (opinion not advice). However, if the merger rumours are true it could be one of the biggest talking points for this quarter of trading. We will continue to cover any further news on Lucid Motors and CCIV potential merger, so stay tuned.
Written by Tyger Fitzpatrick
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.