Lucid Group’s shares experienced a decline of over 10% in after-hours trading following the announcement of a public offering of nearly 262.5 million shares of its common stock. This announcement was made alongside plans for Ayar Third Investment Co., an affiliate of Saudi Arabia’s Public Investment Fund and Lucid’s majority stockholder, to purchase over 374.7 million shares of common stock from Lucid through a private placement conducted simultaneously with the public offering.
Post-transaction, Ayar is anticipated to maintain its approximate 58.8% ownership of Lucid’s outstanding common stock, according to a release from Lucid. The transaction is subject to certain conditions and will have the same initial price per share as that set for the public offering underwriter.
BofA Securities is acting as the sole underwriter for the public offering. Additionally, Lucid plans to grant the firm a 30-day option to purchase up to approximately 39.37 million additional shares of the company’s common stock.
Lucid intends to allocate the net proceeds from both the public offering and the private placement by its majority stockholder for general corporate purposes. These purposes may include capital expenditures and working capital.
These transactions were announced two months after Lucid stated that the Public Investment Fund had committed to providing a $1.5 billion cash infusion, as the company seeks to expand its product line with new models. At the end of the second quarter, Lucid reported cash and cash equivalents totaling $1.35 billion, compared to $1.37 billion at the close of 2023.
Lucid’s sales and financial performance have not met initial expectations due to increased costs, slower-than-anticipated demand for electric vehicles, and marketing and brand awareness challenges. Lucid’s shares have decreased by 22% this year, with the stock closing at $3.28 per share on Wednesday, a less than 1% increase. The company has a market capitalization of $7.6 billion and 2.32 billion shares outstanding.
