Churchill Capital Corp. IV has plunged more than 50% in a two-day streak since it announced the long-awaited deal with Lucid Motors on Monday.
For months, investors bought the shares due to rumors of a deal, causing the share price to rise, only to be sold drastically once it emerged that the Michael Klein-backed SPAC would merge with the vehicle maker. luxury electric.
Lucid Motors, based in Newark, California, merged with Churchill Capital Corp. IV with a transaction capital value of $ 11.75 billion and a pro forma capital value of $ 24 billion.
The transaction included a CCIV cash contribution of $ 2.1 billion and a PIPE investment of $ 2.5 billion, as well as a lock-in provision that “binds holders well beyond closing.”
Shares in SPAC Churchill Capital Corp. IV originally soared about 600% after a Jan. 11 report from Bloomberg said the company was in talks to take the electric vehicle maker public.
Investors flocked to signing blank checks amid a run in EV stocks, which will benefit from a “green wave from the Biden Administration and the Blue Senate,” according to Wedbush Securities analyst Dan Ives. .
Lucid’s efficient battery technology, which CEO Peter Rawlinson has said is “a more advanced technology than Tesla,” also attracted investors, despite valuation concerns that the company has yet to generate revenue from the operations.
To be sure, the Lucid Air sedan also caught the attention of the electric vehicle maker. The company’s first electric vehicle is aimed at the Tesla Model S and boasts a 9.9-second quarter mile time, super-fast charging, and a range of 517 miles.
With prices starting at $ 77,400 ($ 69,900 after US federal tax credits), Lucid is setting its sights on the luxury segment of the electric car market. The company is starting to sell its luxury models, including the Air Dream Edition.
Peter Rawlinson told Yahoo Finance in October last year that he believes “it is really important that we start in a high-level position as a true luxury brand.”
“I am a big believer that the first product defines the brand the way the Tesla Model S defined Tesla as a brand,” said the CEO.
Following the launch of the Dream Edition, Lucid hopes to launch its Gravity high-performance SUV by 2023. A state-of-the-art electric vehicle factory in Casa Grande, Arizona, eventually producing approximately 365,000 vehicles a year, will help the company do just that. .
CCIV shares fell nearly 20% on Wednesday, falling below $ 30 a share for the first time since Feb. 4.