- Shares of Lucid Group dropped during after-hours trading after the electric vehicle startup announced a public offering of nearly 262.5 million shares of its common stock.
- Lucid intends to use the proceeds "for general corporate purposes, which may include, among other things, capital expenditures and working capital."
Shares of Lucid Group dropped by more than 10% during after-hours trading following the electric vehicle startup announcing a public offering of nearly 262.5 million shares of its common stock.
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The announcement was made in conjunction with plans for Lucid's majority stockholder and affiliate of Saudi Arabia's Public Investment Fund, Ayar Third Investment Co., to purchase more than 374.7 million shares of common stock from Lucid in a "private placement concurrently with the public offering."
Following the transaction, Ayar is expected to maintain its approximate 58.8% ownership of Lucid's outstanding common stock, Lucid said in a release.
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Lucid said the transaction is subject to "certain conditions, at the same price per share initially to be paid by the underwriter for the public offering."
BofA Securities is acting as the sole underwriter for the public offering. The EV maker intends to grant the firm a 30-day option to purchase up to nearly 39.37 million additional shares of Lucid's common stock as well.
Lucid intends to use the net proceeds from the public offering, as well as from the private placement by its majority stockholder, "for general corporate purposes, which may include, among other things, capital expenditures and working capital," the company said.
Money Report
The announced transactions come two months after Lucid said the PIF had agreed to supply the company with $1.5 billion in cash, as the EV maker looks to add new models to its product line.
Lucid ended the second quarter with cash and cash equivalents of $1.35 billion, compared with $1.37 billion at the end of 2023.
Lucid's sales and financial performance have not lived up to initial expectations following higher costs, slower-than-expected demand for EVs and marketing and awareness problems for the company.
Shares of Lucid have fallen 22% this year. The stock closed Wednesday at $3.28 a share, up less than 1%. The company's market cap is $7.6 billion. It had 2.32 billion shares outstanding.
