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Lucid (LCID) slides 19% as SEC opens investigation

By William Hoffman

15:13, 6 December 2021

Lucid Motors vehicle on the road
Lucid Motors is being investigated by the SEC - Photo: Shutterstock

Electric car maker Lucid Group disclosed on Monday that it received a subpoena from the US Securities and Exchange Commission last week sending shares lower at the open.

The subpoena was served on Friday and requested documents related to its merger with special purpose acquisition company Churchill Capital Group IV earlier this year.

The disclosure sent Lucid shares tumbling by as much as 19% to as low as $38.06 per share from Friday’s close of $47.27 per share.

“Although there is no assurance as to the scope or outcome of this matter, the investigation appears to concern the business combination between the company (formerly known as) Churchill Capital IV and (Lucid Motors) and certain projections and statements,” Lucid said in a filing with the SEC. “The company is cooperating fully with the SEC in its review.”

Stock performance

Lucid merged with Churchill Capital Group IV in July and debuted on the Nasdaq shortly after at a price of $25 per share.

The shares have since more than doubled in value peaking as high as $55 per share just last week. The luxury electric car maker that has yet to ship a vehicle even surpassed Ford in market capitalisation.

But the new SEC investigation is erasing some of those high valuations bringing Lucid back below Ford to a valuation of around $65.8bn.

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41,790.10 Price
+5.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


0.62 Price
-0.530% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Oil - Crude

73.34 Price
-1.530% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee -0.0019%
Overnight fee time 22:00 (UTC)
Spread 0.030


2,034.95 Price
-1.740% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee 0.0118%
Overnight fee time 22:00 (UTC)
Spread 0.50

Funding sources

Lucid’s investors raised some eyebrows when it went public, specifically for its ties to the Kingdom of Saudi Arabia.

Saudi Arabia’s Public Investment Fund (PIF) invested more than $1bn (£754.6m) in Lucid back in 2018 and contributed to another $2.5bn investment in the company alongside BlackRock and others in February in order to support the merger.  

The sovereign wealth fund PIF manages a portfolio of $400bn to support crown prince Mohammed bin Salman’s economic transformation plans for Saudi Arabia.

Lucid vs Tesla

Lucid is led by Tesla’s former chief engineer of the Model S Peter Rawlinson, who seeks to take on Elon Musk’s electric cars with his own version of a luxury electric vehicle (EV).

Lucid said that its reservations for the forthcoming Lucid Air increased to 17,000 last month, up from the 13,000 boasted during its third-quarter earnings. The company is aiming to produce 20,000 vehicles in 2022 and 50,000 in 2023.

By comparison, Tesla is regularly producing and delivering more than 200,000 EVs per quarter.

Read more: Lucid Group (LCID) stock forecast amid booming EV market

Markets in this article

Lucid Group, Inc.
4.37 USD
0.03 +0.700%

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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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