The deal left the company with a market capitalization of $ 9.17 billion, as of this writing, and will give more than $ 4 billion in cash to Lucid Motors. The transaction will be used to expand Lucid’s Arizona factory, said the company, which eventually expects it to be capable of producing 365,000 vehicles a year.
Lucid is trying to compete directly with Tesla. Peter Rawlinson, Lucid’s CEO, helped develop the Model S sedan while working at Tesla from 2009 to 2012. Tesla, the world’s most valuable automaker by market capitalization, sells the Model S, an electric luxury sedan that It starts at $ 73,990, with long-range variants also having a range of just over 500 miles.
CCIV is a special purpose acquisition company, or SPAC, which is a shell corporation that has the sole purpose of buying or merging with a private company to go public without a traditional initial public offering. Many companies have chosen to go public over the past year through SPAC rather than traditional IPOs, which often invite greater scrutiny from both investors and regulators.
The Lucid merger has been highly anticipated, raising CCIV’s share price more than 470% since the start of 2021. After the deal was announced, CCIV’s share price fell more than 40% .
Lucid is the latest electric carmaker to go public through a SPAC merger.
Arrival of electric vehicle start-ups, Nikola and Fisker have taken advantage of investors’ seemingly endless appetite for SPACs.
SPACs raised $ 76 billion last year, a six-fold increase since 2019.
“A few years ago, SPACs were a relatively sleepy corner of the market. That is no longer the case,” said David Gallers, co-founder and managing partner of Wealthspring, a firm that invests in SPAC. “The multi-billion dollar unicorns are now embracing it.”
With reports from Charles Riley
Correction: An earlier version of this story misidentified the company’s market capitalization.