The Next Tesla To Go Public? 🏎️⚡
Widespread speculation that this company will go public via a SPAC
Tesla’s success in 2020 has been the catalyst for an incredible amount of hype and excitement surrounding electric vehicle stocks. Even companies that are pre-revenue and riddled with massive uncertainty have seen their shares skyrocket. (NKLA)
It all started with a Bloomberg piece suggesting that Michael Klein’s Churchill Capital Corp IV SPAC was in talks to take Lucid Motors public. Although merely a rumor, shares of $CCIV soared over 40% based on this news.
If you don’t know what SPACs are, here is a great piece by Investopedia:
Special Purpose Acquisition Company
Lucid Motors has been around since 2007. Initially known as Atieva, a battery technology company that produced batteries for Forumla E cars, the company rebranded to Lucid Motors in 2016 to produce EVs (electric vehicles).
The company employs several high profile individuals from the automotive industry. Tesla’s former VP of Engineering Peter Rawlinson, who worked on the Model S, is currently the CEO and CTO. Former Head of Design at Mazda NA Derek Jenkins is the VP of Design. They have been able to recruit a significant number of talent from other successful car companies including Tesla.
What We Know So Far?
Disclaimer
It’s important that I warn you that this merger is merely a rumor at this point. I will share what information we have learned and how that may contribute to confirming the rumor, but at the end of the day we don’t have any conclusive evidence.
The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.
Right after the Bloomberg piece came out several people noticed that Lucid Motors was hiring for Director of Investor Relations and SEC Reporting Manager. While this certainly indicates that Lucid is planning on going public in the near future, it doesn’t confirm that this will be via $CCIV SPAC.
The Public Investment Fund of Saudi Arabia 🇸🇦 owns a 67% stake in Lucid Motors. This obviously means that they will have a seat at the table for merger discussions. We know that business dealings in the Middle East heavily rely on close relationships and historical partnerships, so it’s important to look at who is participating.
Michal Klein, who is leading the CCIV management team, has been heavily involved in Saudi Arabia. He helped with Saudi’s Public Investment Fund, advised the Saudi Arabian Mining Company in a $30 billion deal, and has had a few other ventures. This certainly puts Klein and CCIV in a very relevant position to be taking Lucid public.
Another interesting piece of info is Google search activity in Saudi Arabia prior to the Bloomberg piece.
As we can see above there was a spike on Dec 29, 2020 for the “CCIV” search term on Google in Saudi Arabia. This can indicate that some people in SA knew something about CCIV or were curious 🤔
What’s really interesting, however, is the trading volume of $CCIV around that time.
There was a significant jump in trading volume starting at 12/23/20. There weren’t any announcements made about CCIV around that time so we can’t attribute this spike to another event. While this unusual increase in trading volume correlates with CCIV google searches in Saudi Arabia, it doesn’t necessarily mean that the trades were caused by them. Correlation != causation but it’s an important piece of information to consider.
When we look at all this info, can we say that CCIV will take Lucid public and that you have an opportunity to invest in the next Tesla?
While there’s no conclusive answer, I think there is enough reputable coverage and data to suggest that it’s a strong possibility. Personally I have invested in it, but only so by truly understanding the risk. The possibility of no deal is also highly likely at this time and I would suggest thinking deeply before entering such a risky trade.
The author of post owns shares of Churchill Capital Corp IV.
NAILED IT