American electric vehicle (EV) manufacturer Lucid Motors’ stock rallied as much as 11 percent on its Nasdaq debut after the luxury EV startup merged with a blank-check company backed by Wall Street dealmaker Michael Klein.
Run by an ex-Tesla engineer, the luxury EV maker had agreed to go public earlier this year through a merger with Churchill Capital Corp IV. The merger gave the combined company a Pro-forma equity value of $24 billion.
Lucid’s listing is a huge dividend for the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, which had invested over $1 billion in the electric-car maker in 2018 to take a substantial stake. Shares of Lucid, which opened at $25.24, were up 6.5 percent in early trading.
Founded in 2007 under the name Atieva, Lucid Motors is a luxury electric-car manufacturing and development company. Mr. Peter Rawlinson, Tesla’s former Chief Vehicle Engineer, is Lucid’s CEO.
The US-based Lucid aims to compete directly against Tesla. Earlier this month Mr. Rawlinson said in an investor call that its luxury sedan Lucid Air is on track for deliveries in 2021. Lucid plans to roll out its luxury SUV ‘Gravity’ in 2023.
With emission regulations being made tougher in Europe and elsewhere, the Biden administration’s green wave push in the US as well as the rise of electric-car maker Tesla, investors are rushing into the EV sector.
Other prominent players in the sector also went public through mergers with so-called special purpose acquisition companies (SPACs) last year. While some deals such as Fisker have delivered, others such as Nikola have given up short-term gains.
Even though SPACs had gained great popularity among retail traders as well as Wall Street funds last year, a fear of a bubble and frothy valuations triggered a sell-off in shares of SPACs in March.