Shares of Lucid Group (NASDAQ:LCID) gained 5.2% in yesterday’s extended trading session. The upside came after LCID disclosed that Saudi Arabia’s sovereign wealth fund, The Public Investment Fund (PIF), bought about 265.7 million shares of the EV manufacturer in a private placement for an average price of $6.83 per share. The total value of the investment stands at $1.8 billion.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
It is worth mentioning that the recent purchase forms part of LCID’s $3 billion stock offering announcement made earlier in June. The remaining $1.2 billion was raised through an at-the-market offering of 173 million shares of its common stock.
Through its latest investment, the fund has increased its ownership stake in Lucid to 65% of the common stock, up from 60% previously. It is important to note that the PIF is the majority shareholder of Lucid and one of its directors.
As per the data collected by TipRanks, PIF holds 1.37 billion shares of Lucid, for a total estimated value of $7.53 billion.
Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Lucid’s Struggles Continue
LCID stock has tanked about 70% over the past year. Like many other electric vehicle (EV) startups, Lucid is facing challenges related to rising input costs while making efforts to scale up production. These factors pose additional hurdles for Lucid as it navigates the competitive landscape of the EV industry.
Furthermore, the company expects its 2023 production numbers to remain on the lower end of its guidance range, which is between 10,000 and 14,000 vehicles.
On the positive side, LCID plans to unveil its first electric SUV, the Gravity, later this year. In this regard, Lucid is progressing with the second phase of the vehicle’s construction at its facility in Arizona.
Also, Lucid recently forged a long-term strategic technology partnership with renowned British automaker Aston Martin to assist the latter in accelerating its electrification strategy. Aston Martin will gain access to Lucid’s technology to power its future vehicles. In return, Lucid will receive both financial resources and an equity stake in Aston Martin, which is expected to contribute to its growth.
Is Lucid a Buy, Sell, or Hold?
Wall Street’s Moderate Buy consensus rating for Lucid stock is based on four Buys, two Holds, and one Sell. The average price target of $8.17 implies 47.21% upside from the current level.
Investors looking for the most accurate and profitable analyst for Lucid could follow Morgan Stanley analyst Adam Jonas. Copying the analyst’s trades on this stock and holding each position for one year could result in 100% of your transactions generating a profit, with an average return of 51.85% per trade.
