It didn’t go according to the original plan, but Lucid Motors Inc. began trading as a public company on Monday, after shareholders approved a merger with a special-purpose acquisition company (SPAC) last week.
Lucid and Churchill Capital Corp. IV, the SPAC, are officially merged and are now known as Lucid Group Inc. (NYSE: LCID). The newly-formed company started its first day on the Nasdaq with a valuation of $34.6 billion.
Lucid Group stocks rose by as much as 10% shortly after trading opened on Monday, and closed at $26.83, a gain of 6.3% in its Wall Street debut.
What happened with the merger vote?
Last Thursday, Lucid and its planned merger partner, the SPAC Churchill Capital Corp. IV, held a shareholder meeting to vote on the $32 billion deal. The SPAC failed to secure enough votes from investors to seal the deal, so the vote was postponed by a day.
After that meeting, Michael Klein, the billionaire investor behind the SPAC, mentioned the possibility that some investors didn’t vote because the proxy statements sent via email went to investors’ spam folders.
Klein also argued that novice investors may have been unaware of the importance of voting to complete the merger with Lucid. This argument may not be too far off-base. Robinhood’s users have been credited with the extreme ups and downs of Churchill IV shares. Last July, Churchill IV went public at $10 a share. By February, the stock price had soared to nearly $65.
No matter the reason for the lack of votes on Thursday, the merger vote was held again early on Friday and received enough votes to complete the Churchill IV and Lucid merger.
The company’s many unknowns
Lucid attained a lofty valuation without having even delivered a car. Due to delays at the manufacturing facility in Casa Grande, Lucid pushed back its initial promised delivery date of the first half of this year, and now hopes to fulfill buyer reservations by the end of this year.
There are a lot of unknowns with Lucid. It projected that revenue will significantly increase from about $97 million this year to over $2 billion next year and $5.5 billion in 2023, based on an increase of manufacturing and selling cars. Because of delays this year, it’s not yet known what accurate revenue models will look like over the next few years.
Lucid raised $4.4 billion through the merger. Lucid CEO Peter Rawlinson, after ringing the opening bell on the Nasdaq exchange on Monday, told CNBC that the money will help Lucid expand its Casa Grande factory.
Currently, Lucid has just under a million square feet of factory south of Phoenix. Rawlinson said the company just started looking into a 2.7 million square foot expansion on the site. The site has enough room to hold a 5.1 million square foot factory.
This future expansion will help Lucid increase production of its electric vehicles.