CCIV Stock Price Falls Over 35% Pre-Market: Why It Happened

By Amit Chowdhry ● February 23, 2021
  • The stock price of Churchill Capital Corp IV (NYSE: CCIV) fell by over 35% pre-market. This is why it happened.

The stock price of Churchill Capital Corp IV (NYSE: CCIV) fell by over 35% pre-market as of 5:23 AM ET. The stock price fell after it was confirmed that a merger deal was confirmed with Lucid Motors to take the California-based electric vehicle company public.

CCIV’s stock price drop comes off as a surprise reversal as it was surging through February based on speculation that a deal was imminent. Over the past month, the stock price of CCIV increased by over 129%. Some of the economic forces driving stock prices down this week has to do with climbing Treasury yields and the potential of rising inflation triggering valuation concerns, which hit the shares of major growth companies. Investors are also responding to the PIPE offer price, which is significantly less than the stock price of CCIV:

The deal values Lucid at an initial pro-forma equity value of about $24 billion at the PIPE offer price of $15 per share and it will provide Lucid with approximately $4.4 billion in cash (assuming no existing CCIV shares are redeemed for cash at closing). 

KEY QUOTES:

“Lucid is proud to be leading a new era of high-technology, high efficiency zero-emission transportation. Through a ground-up rethinking of how EVs are designed, our in-house-developed, race-proven technology and meticulous engineering have enabled industry-leading powertrain efficiency and new levels of performance. Lucid is going public to accelerate into the next phase of our growth as we work towards the launch of our new pure-electric luxury sedan, Lucid Air, in 2021 followed by our Gravity performance luxury SUV in 2023. Financing from the transaction will also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield purpose-built EV manufacturing facility in North America, and is already operational for pre-production builds of the Lucid Air. 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. Lastly, this transaction further enables the realization of our vision to supply Lucid’s advanced EV technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial and utility segments.”

— Peter Rawlinson, CEO and CTO of Lucid

“CCIV believes that Lucid’s superior and proven technology backed by clear demand for a sustainable EV make Lucid a highly attractive investment for Churchill Capital Corp IV shareholders, many of whom have an increased focus on sustainability. We are pleased to partner with Peter and the rest of Lucid’s leadership team as it delivers the highly anticipated Lucid Air to market later this year, promising significant disruption to the EV market and creating thousands of jobs across the U.S.”

— Michael Klein, Chairman and CEO of CCIV

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.