CCIV stock tanks 27% after Lucid Motors confirms SPAC deal

CCIV) stock

CCIV stock tanks 27% after Lucid Motors confirms SPAC deal

Lucid Motors and Churchill Capital IV (CCIV) have finally confirmed a merger deal to take the California based EV company public. Shares of Churchill Capital …
Lucid Motors and Churchill Capital confirm SPAC deal: CCIV share tank to view your mail Finance Watchlists My Portfolio Screeners Premium Markets News Personal Finance Videos Industries Tech Contact Us MoreMore

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Lucid Motors and Churchill Capital IV () confirmed a merger deal to take the California-based EV company public. Shares of Churchill Capital tanked as much as 27% after the news was announced on Monday evening. The stock's after-hours performance is a reversal from previous sessions when it rallied over reports of nearing a deal.

The transaction values Lucid at an initial pro-forma equity value of approximately $24 billion at the PIPE offer price of $15.00 per share and will provide Lucid with approximately $4.4 billion in cash (assuming no existing CCIV shares are redeemed for cash at closing).

Speculation over a deal has been circulating for more than a month. In mid-February shares of Churchill Capital IV, led by investment banker Michael Klein, of a nearing agreement. On Monday the stock gained double digit percentages after an agreement could come as soon as Tuesday.

The electric vehicle maker is backed by Saudi Arabia’s sovereign wealth fund. A deal with Churchill Capital IV is one of highest profile EV SPAC agreements since Nikola () and Fisker () debuted publicly last year.

Lucid Motors has been closely watched since it is competing in the electric luxury sedan space. The company's CEO and CTO Peter Rawlinson was the chief engineer at Tesla () for the model S prior to joining Lucid Motors in 2013.

Lucid Motors placed its first US production factory in Casa Grande, Arizona. The company aims to meet production goals for of its most expensive vehicle, the Air Dream Edition this year.

“I think it's really important that we start at a high-end position as a true luxury brand. I'm a great believer that the first product defines the brand in way Tesla model S defined Tesla as a brand,” Rawlinson

In an email to Yahoo Finance on Monday prior to a deal announcement, Lucid's official statement read “Lucid Motors has always been clear about its intent to go public at some point in order to accelerate the adoption and global availability of Lucid’s exclusive electric vehicle and sustainability technologies…Currently, our focus continues to be on bringing Lucid Air to production in Spring of this year, with the strong support of key investors and our partners at the Public Investment Fund.”

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Lucid also confirmed it , just blocks away from Tesla's showroom.

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Churchill Capital Corp IV57.37+4.43+8.37%Churchill Capital Corp IV64.31+5.44+9.24%China Coal Energy Company Limited7.57+1.32+21.12%Fisker Inc.18.12+0.13+0.72%MBH Corporation PLC0.4830+0.0170+3.65%TRENDING 1. 2. 3. 4. 5.
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Lucid, run by an ex-Tesla engineer, is the latest firm to tap the initial public offering market, with investors rushing into the EV sector, spurred by the rise of Tesla Inc and with emissions regulations toughening in Europe and elsewhere. The deal, which has a transaction equity value of $11.75 billion, includes a $2.1 billion cash contribution from CCIV and a PIPE (private investment in public equity) investment of 2.5 billion from investors. Reuters was first to report last week that Michael Klein had launched a financing effort to back the Lucid deal.

12h agoAxios

The electric vehicle startup Lucid Motors is going public via merger with the special purpose acquisition company Churchill Capital Corp IV at a valuation of $24 billion, the companies said Monday.Why it matters: The high value of the transaction with the blank-check firm headed by former Citi exec Michael Klein underscores how Lucid could be well positioned in the growing market.Get market news worthy of your time with Axios Markets. Subscribe for free.The Silicon Valley-based company, whose CEO Peter Rawlinson is a Tesla alum, is beginning deliveries this year of its Lucid Air sedan.The company says the luxury vehicle will have over 500 miles of range, the highest in the industry. It's also backed by Saudi Arabia's huge sovereign wealth fund.Were it stands: Investors in the deal in include the Saudi fund as well as funds and accounts managed by BlackRock, Fidelity Management & Research LLC, Franklin Templeton, and others, the announcement states.Via Bloomberg, it's the “largest injection of capital into Lucid since Saudi Arabia’s Public Investment Fund invested more than $1 billion in 2018.”CCIV stock was trading after the announcement at $42 per share, implying a valuation for Lucid of $67 billionWhat's next: The announcement said the deal will provide Lucid with $4.4 billion in proceeds that will be used to expand Lucid's manufacturing plant in Arizona, which Lucid plans to scale up in phases.Beyond the phased-in growth of Lucid Air production, the company plans to bring an SUV into production in 2023.”Scheduled to expand over three phases in the coming years, our Arizona facility is designed to be capable of producing approximately 365,000 units per year at scale,” the announcement states.The proceeds will also help Lucid implement plans to become a tech supplier for other auto manufacturers, and enter the stationary battery storage market.More from Axios: Sign up to get the latest market trends with Axios Markets. Subscribe for free

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Churchill Capital Corp IV confirmed a deal to take Lucid stock public, adding to intensifying competition for Tesla.

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British Airways-owner IAG said on Monday it had raised total liquidity by 2.45 billion pounds ($3.4 billion) by deferring pension contributions and finalising a loan, which will help it survive the travel slump for longer. “In addition to these arrangements, IAG continues to explore other debt initiatives to improve further its liquidity,” IAG said in a statement.

1d agoBloomberg

(Bloomberg) — New Zealand’s central bank may try to dispel talk of monetary tightening at its first policy decision of the year.The Reserve Bank will stress the need for ongoing monetary support when it leaves the official cash rate at 0.25% Wednesday in Wellington, economists said. It is likely to signal the OCR will be on hold well into 2022 and may refrain from publishing a forecast track that includes a rate hike, they said.The economy has performed better than expected in a V-shaped recovery and the housing market is booming, removing any prospect of negative interest rates and turning attention to when the Reserve Bank might begin to remove stimulus. But the RBNZ will be mindful of the many risks ahead as the coronavirus pandemic continues to rage globally, and will not want to get ahead of other central banks for fear of pushing up the New Zealand dollar.“Expect a message of not counting your chickens before they hatch,” said Nick Tuffley, chief economist at ASB Bank in Auckland. “The position New Zealand finds itself in at present looks to be ahead of even the dizziest of high expectations, but a lot can go wrong and the path of least regret for the RBNZ is to continue signaling — as other central banks have — that considerable monetary support will be needed for quite some time.”Earlier this month, Australia’s central bank extended its bond-purchase program and said it doesn’t expect to increase interest rates until 2024, following global peers in moving to stamp out premature tapering speculation. The RBNZ’s rate decision is published at 2 p.m. local time tomorrow and Governor Adrian Orr will hold a press conference an hour later.Auckland LockdownWhen the Monetary Policy Committee convened last week for its first policy decision since November, New Zealand’s largest city had just gone into a snap lockdown. While it was lifted after just three days, it was a reminder of how uncertain the outlook is. New Zealand’s vaccination rollout to the general population is not expected to start until the second half of the year and the border may remain closed through 2021, crippling a tourism industry that was once the country’s biggest foreign exchange earner.To to be sure, the RBNZ is closer to meeting its inflation and employment mandates than many of its peers. Unemployment unexpectedly fell to 4.9% in the fourth quarter and inflation is expected to accelerate to the 2% target by June. Prices for commodities such as wholemilk powder have risen on strong global demand, while construction is buoyant as people unable to take overseas holidays spend money on house renovations instead.New Zealand’s sovereign credit rating was yesterday upgraded to AA+ by Standard and Poor’s Global Ratings, which cited the nation’s success in battling Covid-19 and its rapid economic rebound.The RBNZ “simply must be less dovish” than it was in November because nearly every development since then has “portrayed a stronger, and more inflationary, economy than was expected,” said Stephen Toplis, head of research at Bank of New Zealand in Wellington. Still, “this does not mean the bank will be rushing to shift its current policy stance. And, for tactical reasons, it may even choose to produce a relatively neutral statement,” he said.The RBNZ will revise up its growth, employment and inflation forecasts to reflect the brighter outlook, but the impact of the closed border on the tourism industry has yet to be fully felt, said Sharon Zollner, chief economist at ANZ Bank New Zealand in Auckland.“The New Zealand economy is facing a large, negative income shock, and that will increasingly become evident over coming months,” Zollner said. “The RBNZ will be cautious about these headwinds, along with still-significant downside risks.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

19h agoBloomberg

(Bloomberg) — Reflation trades reached a fever pitch in Australia’s bond markets Monday in a burst of activity that will be hard for global policy makers to ignore.Ten-year yields climbed the most since the height of the market dislocation in March 2020, while benchmark three-year yields inched further above the Reserve Bank of Australia’s 0.1% target. And this was after the RBA ended a two-month hiatus by stepping back into the market to purchase A$1 billion ($790 million) of the shorter-date debt.The moves underscore the challenge to central banks as they strive to keep borrowing costs low for years to come while investors position for a more immediate return of inflation. Global vaccination programs and talk of another commodities supercycle have put Australia at the forefront of bets for rebounding growth and rising prices, making the RBA’s job particularly difficult. But it’s unlikely to be unique.“Commodity prices are showing us a clear reflationary environment,” said Chris Rands, a portfolio manager at Nikko Asset Management in Sydney. “This is all about a global reflation story — the flow of positive vaccine news is saying that ‘this isn’t crazy’.”Expectations of more economic stimulus from the Biden administration and positive signs on containing Covid-19 are pushing rates higher globally, with the U.S. benchmark 10-year yield hitting a one-year high of 1.39% in Asia trading.Australia’s three-year yield edged up to 0.13% Monday while the 10-year yield jumped 17 basis points to 1.6%, a level last seen on March 19. Excluding that day, it’s the highest 10-year yields have been since mid 2019. While the central bank has signaled that rates won’t begin rising for at least three years, money markets are now pricing in about a 30% chance of a hike by mid next year.“It’s entirely reasonable for markets to start pricing in some risk of the RBA hiking rates,” said Prashant Newnaha, senior rates strategist at TD Securities in Singapore. “Markets are going to price in increasingly higher odds of the RBA having to pull the trigger before their three years are up.”Global DimensionEurope has also been caught up in the bonds selloff, with German 10-year yields, the region’s benchmark, climbing to the highest since mid 2020.As the euro area’s yields track those on Treasuries higher, it faces an “undesirable tightening of monetary conditions,” according to Erik Nielsen, group chief economist at Unicredit SpA.If they continue to climb in coming weeks, “it’ll leave the ECB no choice but to step up their purchases,” Nielsen wrote in an investor note Sunday. “I would be surprised if we don’t hear the first warning shots from key members within the next couple of weeks.”Some Fed officials, though, are willing to accept the rising yields as a sign of optimism in the recovery. That’s the view of Federal Reserve Bank of New York President John Williams, as explained in an interview with CNBC Friday.And Australia’s policy makers may yet disappoint rates traders preparing for a shift.“The central banks fear that the bond market is jumping at what will be a transitory hike in inflation over the months ahead,” said Shane Oliver, chief economist at AMP Capital Investors Ltd. in Sydney. “They would rather look through any short term spike in inflation, and allow the recovery to use up spare capacity and generate higher wages growth before tightening — and this may still be several years away.”What Bloomberg Economics Says…“Rising yields are likely to pressure further enlargement of the RBA’s recently-expanded bond purchase program, in an effort to limit further currency appreciation. There is also an increased risk of an earlier than planned announcement of a switch the yield target to the November 2024 bond..”– James McIntyre, economistFor the full note, click here.Read More: Bond Traders Can See RBA Yield Curve Control’s Use By DateStill, Australia’s success in containing Covid-19 has rapidly restored sentiment among households and businesses. That’s helped unemployment fall more than a percentage point from its pandemic peak of 7.5%, and rising property prices and cashed-up consumers are a potent mix for economic expansion.This prompted Westpac Banking Corp. economist Bill Evans to last week raise his forecast for Australia’s 10-year yield to 1.9% by the end of this year, from 1.55% earlier.In addition to purchases to control the three-year yield, the RBA is still conducting regular purchases of longer-dated bonds under quantitative easing, and bought another A$2 billion of them on Monday.(Updates with Europe, U.S. in paragraphs 8-11.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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15h agoBloomberg

(Bloomberg) — Lucid Motors Inc. is merging with a blank-check company run by financier Michael Klein that values the combined entity at a pro-forma equity value of $24 billion, the biggest in a series of deals involving electric-vehicle startups cashing in on investor appetite for battery-powered cars.The carmaker has shied away from comparisons to market leader Tesla Inc., but the public listing positions it to compete for a slice of what’s expected to become a rapidly growing market for EVs. The deal, which confirms an earlier Bloomberg News report, will generate about $4.4 billion in cash for the 14-year-old company, which plans to use the newly acquired funds to bring vehicles to market and expand its factory in Arizona.Lucid is the latest beneficiary from a wave of investment targeting EV startups and next-generation automotive technology suppliers, sparked in part by a rally in Tesla shares over the past year as Wall Street seeks to match up investors with once-private ventures.The reverse-merger represents the largest injection of capital into Lucid since Saudi Arabia’s Public Investment Fund invested more than $1 billion in 2018. The agreement included a $2.5 billion private placement in public equity, or PIPE, the largest of its kind on record for a deal with a special-purpose acquisition company. It was led by existing investor PIF as well as BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital, according to a joint statement from Lucid and Churchill Capital Corp IV, the acquisition company.The placement sold at $15 a share — or a 50% premium to Churchill’s net asset value — which translates into about $24 billion in pro-forma equity value, the companies said. The combined company has a transaction equity value of $11.8 billion.Shares of Churchill fell as much as 34% in after-hours trading after closing at $57.37.“I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory,” Lucid Chief Executive Officer Peter Rawlinson said in an interview. “This is a technology race. Tesla gets this. It’s why they are so valuable and Lucid also has the technology.”The SPAC is the largest run by Klein, a former Citigroup Inc. investment banker who has played a prominent role in guiding the Kingdom of Saudi Arabia’s investments, serving as an adviser to the PIF. Among other deals, he advised on the Saudi Aramco initial public offering.The Lucid transaction is expected to close in the second quarter.Production TargetsLucid will now start production of its debut EV, a luxury sedan called the Air, in the second half of this year. The company had previously said deliveries of the $169,000 car would start in the second quarter. But the company has decided to not commit to a start date as a result of the talks with Churchill Capital, Rawlinson said. The company later plans to produce more affordable versions of the Air, as well as a battery-electric SUV.The Casa Grande factory currently has installed production capacity for 34,000 units annually, based on three work shifts, Rawlinson said. Lucid hopes to ramp that up to capacity for 85,000 units per year as soon as 2023, after additional investments are made in the plant.Lucid forecasts deliveries of 20,000 vehicles in 2022 generating sales of $2.2 billion. It sees revenue rising to $5.5 billion and $9.9 billion in 2023 and 2024 respectively, according to a presentation made to investors posted to the company’s website. The company foresees positive earnings before interest, taxes, depreciation and amortization of $592 million in 2024.Beyond its manufacturing capacity, the company expects to invest heavily in new products and will grow headcount to 5,000 over the next year, Rawlinson said.Lucid’s debut vehicle will be the closest car yet to challenge Tesla in the still niche market for premium EV sedans. The Air model has a range of 517 miles on a single charge, based on Environmental Protection Agency estimates. It can reach zero-to-60 miles per hour in 2.5 seconds and has access to Electrify America’s network of DC fast chargers. That compares with the Model S Plaid +, which has a maximum range of around 520 miles, a zero-to-60 launch of less than 2 seconds and access to Tesla’s nationwide network of fast chargers.Ire of MuskThe market capitalization of Lucid is just a fraction of Tesla’s almost $690 billion valuation, but not bad for a luxury electric-vehicle maker that has yet to build its first car. Rawlinson has stated repeatedly that Lucid is not a direct competitor to Tesla because his company’s price point is beyond the mass market buyers Elon Musk aspires to reach.But there are signs of a budding rivalry.The Newark, California-based company — the headquarters of which are just 16 miles from Tesla’s in Palo Alto — says its first EV will go the distance against the longest-range Model S sedan. Lucid’s new factory arose out of the Arizona desert as fast as Tesla’s latest quick-build plant in China. And growing interest in the startup and its CEO has drawn the ire of none other than Musk.Rawlinson and Musk have a complicated history. The Lucid CEO was chief engineer on Tesla’s flagship Model S, but Musk has downplayed his role in its development and also accused him in a tweet of leaving the company “in the lurch just as things got tough” in 2012.Longer-term, Lucid is also working on energy storage solutions similar to Tesla’s Powerwall. The company wants to use the same battery technology in its cars to develop batteries to power homes and utility-scale devices and already has working prototypes, Rawlinson said.(Adds CEO comments from 7th paragraph; Lucid’s production targets from 11th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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