Shares of Lucid Group (LCID) plunged about 18% in pre-market trading on Thursday after the electric vehicle (EV) company announced plans to sell 262.4 million shares of common stock through a public offering. In addition, the company announced its preliminary Q3 results.
The announcement of a public offering follows a cash infusion of $1.5 billion by an affiliate of Saudi Arabia’s Public Investment Fund (PIF) just two months ago. In addition, LCID will grant its sole underwriter, Bank of America, a 30-day option to purchase up to 39.4 million additional shares of its common stock.
LCID’s Largest Shareholder Will Acquire More Shares
Along with this public offering, LCID stated that the PIF affiliate, Ayar Third Investment Company, which is also Lucid’s largest shareholder, will acquire 374.7 million shares of common stock in a private placement offering. This strategic move will allow Ayar to maintain its 58.8% ownership stake in Lucid.
The EV maker stated that the proceeds will be used for general corporate purposes, including capital expenditures and working capital.
LCID Announces Preliminary Q3 Results
In addition, Lucid announced its preliminary Q3 results, with revenues likely to be in the range of $199 million to $200 million. Meanwhile, the company expects Q3 loss between $765 million and $790 million. LCID produced 1,805 vehicles and delivered 2,781 vehicles in the third quarter. The company is expected to announce its third-quarter results on November 7.
Is Lucid Stock a Good Buy?
Analysts remain sidelined on LCID stock, with a Hold consensus rating based on seven Holds and one Sell. Over the past year, Lucid stock has plunged by more than 30%, and the average LCID price target of $3.22 implies a downside potential of 1.8% from current levels.
