Lucid (LCID), a penny stock, gained about 2% in yesterday’s trading session. The upside came after the company’s SEC filing revealed that LCID’s largest shareholder, Saudi Arabia’s Public Investment Fund (PIF), purchased about 396 million LCID shares at $2.59 per share on October 30 and 31. The total value of the investment stands at $1.03 billion.
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Lucid is an electric vehicle (EV) manufacturer focused on producing luxury cars with advanced technology. The Saudi Wealth Fund’s investment follows the company’s recent capital raise of $1.67 billion, during which Lucid sold 262.4 million shares of common stock through a public offering.
Investors should note that PIF has been regularly injecting cash into Lucid to support the company’s financial standing. The most recent cash infusion was about $1.5 billion just three months ago. With these repeated capital injections, PIF aims to maintain its position as the leading investor.
Lucid’s Struggles Continue
Despite receiving a capital boost from PIF, Lucid continues to face challenges related to rising input costs. Further, the company’s falling production numbers are also a matter of concern. For instance, LCID produced 1,805 vehicles in the third quarter, which missed the analysts’ estimates of 2,267 vehicles. Moreover, the figure declined from the 2,110 units in the last quarter.
Amid the falling production numbers, Lucid is gearing up for the mass production of its new SUV model, the Gravity SUV, aiming to produce over 9,000 vehicles this year. However, the company’s escalating operating costs cast doubt over the company’s prospects.
LCID to Report Q3 Results on Nov 7
The new investment comes ahead of its Q3 earnings report, scheduled for release on November 7.
Wall Street analysts expect the company to report a loss of $0.31 per share compared with a loss of $0.28 in the year-ago quarter. Meanwhile, LCID’s revenues are expected to increase 42.3% year-over-year to $196.23 million.
Is LCID Stock a Good Buy?
Turning to Wall Street, LCID stock has a Hold consensus rating based on seven Holds and two Sells assigned in the last three months. At $3.05, the average Lucid price target implies a 36.16% upside potential. LCID stock has tanked about 47% year-to-date.
