Lucid Motors electric vehicles
Source: Lucid Motors

Why Is CCIV Stock Dropping? Will It Go Back Up After the Lucid Merger?


Jul. 16 2021, Published 8:26 a.m. ET

Churchill Capital IV (CCIV) stock had been volatile in 2021. The stock increased by over 450 percent as investors awaited a merger announcement with promising EV (electric vehicle) startup Lucid Motors. The stock then plummeted after the terms of the transaction were revealed in Feb. 2021, and is now 65 percent below its 52-week highs. Why is CCIV stock falling? Will it go back up after the merger?

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Voting on the proposed merger deal is scheduled to take place on Jul. 22. The deal is expected to close immediately after it's approved by CCIV shareholders. Lucid stock will trade on the Nasdaq under a new ticker symbol, “LCID.”

CCIV stock is dropping

CCIV stock is dropping due to a market sell-off in small-cap and growth stocks, as well as bearish sentiment building ahead of the shareholder merger vote. The significant fall has pushed CCIV below its 50- and 200-day moving averages, though it now looks to be much more reasonably valued.

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why cciv dropping go back up lucid merger
Source: Lucid Motors

When will Lucid cars be available?

Lucid Motors is on track to begin manufacturing and delivering the Lucid Air this year. After a series of setbacks, the company has completed its pre-production phase and plans to deliver under 1,000 vehicles in 2021. The EV company intends to expedite its plant expansion to meet demand and set up a dedicated assembly line for its next model, an electric SUV. Lucid plans to deliver 20,000 vehicles in 2022, and 135,000 vehicles in 2025.

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why cciv dropping go back up lucid merger
Source: Lucid Motors

Is the Lucid Air better than Tesla's Model S Plaid?

As the Lucid Air outperforms Tesla's Model S Plaid in certain areas and vice versa, identifying the better car is tough. They're expected to compete in the premium-luxury crossover EV market. The Plaid is the premium model of Tesla's Model S, while the Lucid Air is a base model.

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In terms of pricing, the Tesla Model S Plaid is somewhat more expensive at $129,990 versus Air’s starting price of $69,900 (after tax credits). The Lucid Air is expected to have over 500 miles of range, compared with 390 miles for the Plaid.

Tesla's Model S Plaid takes about 15 minutes to charge for 200 miles, while Lucid Air takes 20 minutes for 300 miles. However, the Plaid's acceleration beats the Air's, with the Tesla car hitting 60 miles per hour in 1.99 seconds, and Lucid's taking 2.5 seconds.

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Will CCIV stock go back up?

CCIV stock should go back up after the Lucid merger is closed. According to WalletInvestor, CCIV will reach $44.50 a year from now and $123.10 in five years. These targets suggest a 94 and 436 percent upside to the stock's current price, respectively.

Is CCIV a good EV stock to buy?

Based on CCIV’s current price, Lucid would have a pro forma market value of around $36.7 billion. Lucid expects revenue of $97 million in 2021 and $14 billion in 2025, meaning 2021 and 2025 price-to-sales multiples of 378.4x and 2.6x, respectively. If Lucid can keep its promises, CCIV stock might be a multibagger.


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