Lucid Motors Group (LCID) is a leading innovator in electric vehicles founded in 2007. For over a decade, LCID has been developing cutting-edge technology to deliver the most efficient and safe driving experience. From groundbreaking electric vehicles to its award-winning autonomous driving system, Lucid is pioneering the future of the automotive industry. Recently, LCID saw its stock price rise more than 90% in a single trading session, before retracing to a still impressive 43% gain on the day.
Saudi Arabia's Potential Takeover of Lucid Group
Lucid Group's stock suddenly skyrocketed, gaining almost 100% in one day on speculation it would be taken over. Reports suggest Saudi Arabia’s Public Investment Fund, which owns more than 60% of the company, is working with a major bank, likely JPMorgan, to finalize a deal.
The fund has been active in its investments in the past, leading to speculation it may take a more hands-on role in this situation. This caused the stock to be halted multiple times due to the sharp spike in volatility.
Whether the rumor is true or not, Lucid Group's stock will experience some volatility, and other EV start-ups like Rivian and Mullen Automotive may also be affected.
Electric Vehicle Short Squeeze
Bears and short-sellers have been pessimistic about the EV market, especially start-ups, for a long time. The cost of getting an EV to market, the difficulties of production, and the growing competition from companies like Tesla make the outlook dim.
Lucid Motors has been a particular target of short-sellers, with their short interest exceeding 25% before the latest rumor. 3rd party services are even claiming the off-exchange short interest was at over 55%. This suggests that Lucid Motors is ripe for a short squeeze, and all it would take is the right news to trigger it.
False Rumors?
Despite the assertions that this hearsay is incorrect, including one from FuzzyPanda (a renowned and highly esteemed reporting team), there is still some contention. As mentioned earlier, the Saudi Arabia Public Investment Fund (PIF) owns about 60% of LCID and is known for taking an active role in large investments.
Conclusion
Electric vehicles are an emerging industry that has been met with both optimism and skepticism. Lucid Motors Group (LCID) is a prime example of the volatility that this sector can experience, with its stock price jumping more than 90% in one day on speculation of a potential takeover by Saudi Arabia’s Public Investment Fund. This event highlights the potential of the electric vehicle market, as well as the risks involved. Whether or not the takeover is successful, Lucid and other EV start-ups will continue to experience volatility and uncertainty as the industry develops and expands. It is important for investors to remain aware of the risks and potential rewards of investing in electric vehicles and other emerging industries.
