News – USA – Lucid Motors goes public. Merger partner’s stock plunges

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The worst-kept secret on Wall Street is finally official After weeks of speculation, the hot electric vehicle startup Lucid Motors has agreed to merge with a publicly traded company

Churchill Capital Corp IV

Now Churchill Capital (ticker: CCIV) stock is plunging nearly 40% in premarket trading. Investors believe Lucid deserves a sky-high rating, just not a flashy one

The merger values ​​Lucid at around $ 12 billion That figure, however, is based on the money coming in from the special purpose vehicle Acquisition.The valuation of Lucid based on Churchill’s share price on Monday is $ 92 billion based on the 16 billion shares that will be in circulation upon completion of the merger

That’s enough to make Lucid – a company that doesn’t yet sell a car – the fifth largest automaker in the world by market capitalization worth more than

General Motors

(GM),

NOK

(NOK) and

BMW

(BMW Germany) among others

High-quality versions of the luxury Lucid Air are slated for late 2021, and lower-priced versions will hit the market in 2022, Lucid takes one

Tesla

(TSLA) approach to its business, starting with more expensive models and going down there

However, investors think twice about valuation after Churchill shares fell around 38% on the Tuesday leading up to trading, leaving Lucid at around $ 57 billion, more than ten times the EV startup’s market cap

Fisker

(FSR)

Lucid forecasts sales of around 14 billion US dollars in 2025 For comparison: Fisker forecasts sales of around 13 billion US dollars in 2025 Lucid forecasts a big jump to 23 billion US dollars in 2026 Fisker’s projections do not work so far

The valuation of nearly $ 60 billion is still more than

Ford engine

(F), Lucid in Top 10 Most Valuable Automaker Clubs Investors are in part excited about Lucid’s pedigree Peter Rawlinson, CEO of Lucid, is Tesla’s former vice president of engineering and chief engineer for the Model S.

Overhyped expectations have always been a risk for investors who bought Churchill stock based on rumors of a Lucid deal with no way to know the premerger rating or the shares outstanding before the deal was announced

At least for a while, investors will have to grapple with the consequences of this bet

Tuesday seems to be another tough day for the markets

S&P 500

Futures are off 07%

Dow Jones industry average

Futures are down 0.3% futures on the tech heavy

Nasdaq Composite

17% fell

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Lucid Motors, special-purpose acquisition company, Tesla, Inc, Warehouse, electric vehicle