Lucid Group’s shares declined by more than 10% in after-hours trading, following the company’s announcement of a public offering involving approximately 262.5 million shares of its common stock. This declaration was made alongside a plan for Lucid’s major stockholder, Ayar Third Investment Co., an affiliate of Saudi Arabia’s Public Investment Fund, to purchase over 374.7 million shares in a private placement concurrent with the public offering.
Post-transaction, Ayar is anticipated to retain around 58.8% of Lucid’s outstanding common stock, as stated by Lucid. The transaction is subject to specific conditions, set at the same per-share price initially offered to the underwriter for the public offering. BofA Securities is serving as the sole underwriter, and Lucid plans to grant the firm a 30-day option to acquire up to nearly 39.37 million additional shares.
Lucid intends to utilize the net proceeds from both the public offering and the private placement for general corporate purposes, such as capital expenditures and working capital. These transactions follow a $1.5 billion cash infusion from the Public Investment Fund, disclosed two months prior, aimed at expanding Lucid’s product line.
At the end of the second quarter, Lucid reported cash and cash equivalents of $1.35 billion, a slight decrease from $1.37 billion at the end of 2023. However, the company’s sales and financial performance have not met initial projections due to higher production costs, slower demand for electric vehicles, and challenges in marketing and brand awareness. Lucid’s shares have dropped 22% this year, closing Wednesday at $3.28, up less than 1%. The company holds a market capitalization of $7.6 billion with 2.32 billion shares outstanding.
