Lucid Motors sign and car
Source: Lucid Motors Facebook

Lucid Motors (LCID) Stock—Investors Should Wait for a Lower Price

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Jul. 23 2021, Published 9:47 a.m. ET

Lucid Motors and CCIV (Churchill Capital IV) announced their merger in February. The merger vote was scheduled for July 22, but it had to be delayed one day because not enough shareholders approved the proposal. Before the merger takes place, investors want to know if Lucid Motors (LCID) stock is a good buy.

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The merger values Lucid at a pro forma equity value of $24 billion. Lucid will receive $4.6 billion in gross cash proceeds, including $2.5 billion in PIPE (private investment in public equity) at $15 per share.

When will Lucid Motors stock start to trade?

The Lucid Motors and CCIV merger vote was set for July 22. The business combination was expected to close on or around July 23. However, the company wasn't able to reach a quorum on one resolution and adjourned the meeting for one day. Due to its heavy retail presence, the company is struggling to get enough voting participation. The merger is still expected to pass. The company’s executives mentioned that they still expect the merger to close on July 23.

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lucid motors cciv vote
Source: Lucid Motors Facebook

The stock symbol will change from "CCIV" to the new "LCID" ticker symbol. It will also be delisted from the NYSE and moved to the Nasdaq.

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How to vote for the CCIV and Lucid Motors merger?

The CCIV-Lucid Motors merger vote is scheduled for July 23 at 10:00 a.m. ET via live webcast. On July 20, CCIV sent out a reminder to its shareholders to vote their shares if they owned them as of the June 21 record date even if they no longer own them. However, the company highlighted several possible reasons why enough shareholders didn’t vote. One reason could be that the codes sent to them by the company through email went to spam.

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Stockholders whose shares are held of record by a broker, bank, or another nominee should contact their broker, bank, or nominee to ensure that their shares are voted.

Shareholders can also vote instantly by contacting MacKenzie Partners, Churchill IV's proxy solicitor, or call toll-free at 1-800-322-2885, internationally at +1-212-929-5500 or online at http://proxyvote.com or http://proxypush.com.

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Is Lucid Motors expected to go up after the merger?

CCIV stock has remained very volatile. As the anticipation of CCIV’s merger with Lucid Motors built up, investors bid up the stock and it increased by over 450 percent to only plummet after the terms of the transaction were revealed in February 2021. The stock is 60 percent below its 52-week highs.

After the company announced the merger date, CCIV stock climbed by 9.4 percent on July 20. Usually, once a company's reverse merger is completed, its share price tends to drop as retail traders book profits. Since CCIV stock has already factored in a lot of investor enthusiasm going into the shareholder vote, the stock will likely fall immediately after the merger.

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Is Lucid Motors stock a good long-term investment?

Lucid Motors has a lot of positive catalysts, including the start of its production, which could happen in the second half of this year. Considering the EV market's huge potential, Lucid Motors has a lot of opportunities. However, along with opportunity, the competition is also ramping up fast in this space. Investors have already priced up a lot of positives in the stock.

lucid motors stock buy
Source: Lucid Motors Facebook
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Lucid’s long-term forecasts are rosy and going by them, it makes sense to hold the stock long term. However, we can’t take Lucid's numbers at the face value. It's one thing to make forecasts and entirely different to go through the production process and deliver on promised numbers. According to Lucid Motors' aggressive targets, it expects to deliver positive gross profit in 2022, positive EBITDA in 2024, and positive net profit by 2025. The company expects to achieve a positive net profit by 2025.

We know from Lucid Motors' volume projections that it expects to deliver 135,000 vehicles by 2025. Tesla, the EV pioneer, only posted an annual profit last year after operating in this space for more than 18 years. Tesla took almost half a million vehicles to turn profitable. How Lucid expects to do this on a volume of just 135,000 vehicles amid increasing competition will be interesting to see.

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Is Lucid Motors stock a good buy?

Even after the stock’s drop from its peak, CCIV has run up quite a bit going into the merger. As the merger euphoria cools down, investors should get a chance to buy this stock at a lower price.

How to buy Lucid Motors stock?

Until July 22, you can purchase the shares of Lucid Motors by buying CCIV stock. After the completion of the merger on July 23, investors can buy the shares of Lucid Motors, which will start to trade under the ticker "LCID" on Nasdaq. You can buy its shares like any other share. All you need to do is open a brokerage account if you don’t already have one. Decide on the number of shares you would like to buy and choose the order type like the market order, limit order, or stop order.

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