Shares of Electric vehicle maker Lucid Group (NASDAQ:LCID) almost doubled at one point in Friday afternoon’s trading. New reports suggest that the company may be on the cusp of being bought out. Who’s doing the buying? A surprisingly familiar name. A substantial portion of Lucid Group is already owned by the Saudi Arabia Public Investment Fund. Back in late December, said fund pumped $915 million into the company. Now, it may be coming back to the table to get what’s left of Lucid under its control.
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This move comes at an interesting time, as analyst Adam Jonas suggested that Lucid stock may be overvalued by as much as 40%. Jonas noted that the market itself was likely to face “severe EV deflation.” Moreover, Lucid would have a serious problem with “execution headwinds.” Its focus on the luxury market has left it in the unenviable position that it’s making cars for more than it can sell them for. Perhaps, if the Saudis meant to buy Lucid, they might shift its focus or find another way to give it a boost toward profitability.
Wall Street as a whole is much more cautious than optimistic here. Analyst consensus on LCID stock calls it a Hold with an average price target of $13.28 per share and 25.39% downside risk.
