The potential merger between the special purpose acquisition company
Churchill Capital Corp IV
and electric vehicle startup Lucid Motors appears to be one of Wall Street’s worst-kept secrets.
Churchill (ticker: CCIV) shares are rising again after another report that a merger announcement was imminent. However, neither company is ready to confirm the deal.
Churchill shares were up 30% to $ 52 in midday trading Tuesday. The shares traded below $ 37 earlier in the day. The stock has paused for short periods due to volatility.
The deal is said to value Lucid at around $ 12 billion. Churchill has roughly $ 2 billion in cash on his books, which means he will end up with roughly 17% of the new company. That is a very rough guide and will change when the details of the deal come up or if they come up.
With Churchill’s stock trading at $ 52, Lucid’s implied present value could be more than $ 40 billion. Most SPAC offerings are made based on the $ 10 unit price at which SPACs issue shares.
It is simply not clear whether the $ 12 billion figure is the current valuation or the valuation that was reached in the deal. There are very few details. Churchill and Lucid were not immediately available to comment on today’s report.
Electric vehicle manufacturer
(FSR), by comparison, is valued at approximately $ 6 billion, based on its 294 million fully diluted shares outstanding. Fisker plans to offer a roughly $ 40,000 SUV that will go on sale around 2022.
Lucid plans to target the higher end of the auto market. It will start with an aspirational EV model that could cost more than $ 165,000 and boast 1,080 horsepower, fast charge times and more than 500 miles of range on a single charge. The first high-end Lucids could hit the streets later this year before the company produces low-end luxury cars in 2022.
Expectations for Lucid products are high. Churchill shares have risen more than 400% in the last three months, crushing comparable returns from the
Dow Jones Industrial Average.
Write Al Root at [email protected]