- Churchill Capital IV fell 35% in pre-market trading after Lucid Motors struck a deal to go public through the SPAC.
- The deal will generate $ 4.4 billion for Lucid, which plans to use the funds to expand its facilities in Arizona.
- The Churchill transaction values Lucid at about $ 24 billion at PIPE’s offer price of $ 15.00 per share.
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Churchill Capital IV shares fell as much as 35% in early trading Tuesday after the blank check company’s merger with Lucid Motors was announced.
Electric vehicle maker Lucid confirmed it would go public through a special-purpose takeover company led by financier Michael Klein with a pro forma equity value of $ 24 billion.
The deal will generate about $ 4.4 billion in cash for Lucid, 14, who plans to use the funds to expand its manufacturing plant in Arizona. The facility has a production capacity of 365,000 units per year at scale.
Churchill’s pre-trade stock performance is a reversal from earlier sessions when reports on the deal sparked back-to-back rallies.
Speculation about the deal has been circulating for more than a month. In early February, Churchill Capital IV shares soared 33% following a report that the SPAC was approaching a deal. On Monday, the shares rose 19% after Bloomberg said a deal could be announced Tuesday.
Lucid’s deal with Churchill, expected to close in the second quarter of this year, marks one of the highest-profile SPAC deals in the electric vehicle space after a wave of interest in vehicle startups. electrical and automotive technology providers. That may have been triggered by a rally in Tesla shares in the last 12 months. Peter Rawlinson, the company’s CEO and CTO, is known for his work as chief engineer at Tesla for the Model S. He joined Lucid in 2013.
“I see the SPAC as just a tool, another lever to pull, where we can accelerate our trajectory,” Rawlinson told Bloomberg in an interview. “This is a tech race. Tesla gets it. That’s why they are so valuable and Lucid has the technology too.”
The SPAC merger represents the largest capital boost since the Saudi Arabian sovereign wealth fund injected an investment worth more than $ 1 billion in 2018. The deal was led by the Public Investment Fund, as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management.
Churchill shares fell as much as 35% in pre-market trading to $ 37.34 a share, after closing at $ 57.37 a share on Monday.