Lucid Motors: When Cash Runways Turn into Stock Market Sprints and Wall Street Takes a Tumble!

[ad_1]

Lucid Dreams Turn to Dismal Reality: A Comedy of Errors on Wall Street

In the latest episode of "As the Stock Market Turns," we find ourselves in the gleaming corporate globe of Lucid Motors, where CEO Peter Rawlinson stands proudly—albeit slightly bewildered—at Nasdaq MarketSite, announcing something that sounds very much like corporate "Oops!" on live television. They just managed to raise about $1.75 billion with a public offering of nearly 262.5 million shares, and Wall Street promptly responded as if a pie had been thrown in their faces.

Rawlinson declared this fundraising fiesta was a timely, strategic move to ensure Lucid has enough cash to keep the electric vehicle assembly line humming and avoid any ominous disclosures about "going concern." He hoisted his metaphorical flag of confidence and proclaimed, "We have a cash runway to Q4 next year!"—which, let’s be real, sounds a lot more like a statement you make ten minutes before boarding a plane than a corporate financial assurance.

But alas, the Wall Street analysts, glowing minds of reason, saw this as a signal to clutch their pearls. After all, Lucid had $5.16 billion in Total liquidity to end the last quarter, including a comfortable $4 billion cash cushion. It’s like having a full fridge and deciding to stop by the drive-thru for more fries. In their pearl-clutching panic, the analysts couldn’t help but wonder why the car company was suddenly in a capital-raising frenzy right after a fat $1.5 billion cash infusion from Saudi Arabia’s Public Investment Fund. Was it a "why-not" moment, or just a particularly aggressive case of corporate FOMO?

That pile of dollars had barely settled before Lucid announced its plans to maintain adequate cash with a larger-than-expected capital raise at what seemed like the most inopportune moment. Morgan Stanley‘s analyst Adam Jonas threw shade, saying it came slightly larger and sooner than expected, akin to showing up to a fancy party in your Sunday best but accidentally walking in with yesterday’s breakfast still stuck to your shirt.

Shares of Lucid promptly nosedived by about 18%, marking the stock’s worst day since December 2021. It’s a chaotic ballet of numbers, akin to watching a toddler trying to balance on a seesaw. Rawlinson, from his shiny new suburban Detroit office, pointed out that raising funds "opportunistically" was all part of the plan. Much like hedging bets during a poker game, let’s hope he doesn’t find himself short-stacked.

As Lucid spins its wheels on a whirlwind of expansion—upgrading the U.S. factory, building another plant in Saudi Arabia, and prepping the Gravity SUV—Rawlinson assures us the company is in a "highly capital-intensive investment period." Yes, it’s a fancy way of saying, “We’re spending a lot of money to keep up with our ambitious goals and our dreams of electric grandeur.” Cue the violin.

A juicy side mystery emerged from the depths of this capital escapade: Lucid’s majority stakeholder, Ayar Third Investment Co., plans to scoop up more shares to maintain its hefty 59% ownership. It’s like inviting your wealthy friend out to dinner just so they can cover your tab, continuously.

While Rawlinson insists this is all par for the course, many onlookers are left scratching their heads, wondering if they missed the email that outlined this wild strategy of raising money right after securing a fat cash injection. You’d think the boardroom strategy meetings are more confounding than a season finale of a reality show.

And while Lucid boasts record deliveries for its all-electric sedan, issues loom over the carmaker as it tries to rev up production amidst spiraling costs and marketing hiccups. Is this brand destined to be the underdog? Or merely the car on the side of the road with its hood up, as the rest of the industry speeds past? Only time—and a few more interesting press releases—will tell.