Lucid Motors stock drops after $860M share sale announcement

Lucid Motors shares took a hit after the electric vehicle manufacturer announced plans to sell 262.4 million common shares in a public offering valued at approximately $860 million, based on Wednesday's closing price.

Additionally, the company has granted its underwriter, Bank of America Securities, a 30-day option to purchase up to an additional 39.4 million shares, according to a statement released by Lucid.

This move follows a recent cash injection of up to $1.5 billion from a subsidiary of Saudi Arabia's Public Investment Fund (PIF), which occurred two months prior.

In a separate transaction, Ayar Third Investment Company, a PIF subsidiary and Lucid’s largest shareholder, will purchase 374.7 million common shares in a private placement that aligns with the public offering. This strategy enables Ayar to maintain its controlling stake of 58.8% in Lucid.

Lucid’s stock dropped around 15% in after-hours trading, marking a significant decline, with the stock already down about 22% this year as of Wednesday's market close.

The company, one of the few electric vehicle manufacturers in the U.S., stated that it intends to use the proceeds for general corporate purposes, including capital expenditures and working capital.

Lucid is gearing up to begin production of its new SUV, Gravity, later this year.

This announcement comes roughly a week after Lucid reported delivering 2,781 vehicles in the third quarter, exceeding analysts’ expectations.

However, it produced only 1,805 electric vehicles, falling short of production forecasts. Currently, Lucid manufactures just one model, the Lucid Air.

On Wednesday, the company also revealed preliminary third-quarter revenue of between $199 million and $200 million, surpassing analysts’ average estimate of $196.4 million, according to data compiled by Bloomberg. Lucid will report its full earnings on November 7.