Lucid shares fall on public offering of nearly 262.5 million shares

Shares of Lucid Group fell more than 10% in after-hours trading after the electric vehicle startup announced a public offering of nearly 262.5 million shares of common stock.

The announcement came amid plans for Lucid's majority shareholder and subsidiary of Saudi Arabia's Public Investment Fund, Ayar Third Investment Co., to acquire more than 374.7 million common shares of Lucid in a “private placement concurrent with the public offering.” “

Following the transaction, Ayar is expected to retain its approximately 58.8% interest in Lucid's outstanding common stock, Lucid said in a news release.

Lucid said the transaction is “subject to certain conditions, at the same price per share originally paid by the underwriter for the public offering.”

BofA Securities is acting as sole underwriter for the public offering. The electric vehicle maker intends to grant the company a 30-day option to purchase up to nearly 39.37 million additional shares of Lucid common stock.

Lucid intends to use the net proceeds from the public offering as well as the private placement by its majority shareholder “for general corporate purposes, which may include, among other things, capital expenditures and working capital,” the company said.

The announced transactions come two months after Lucid announced that PIF had agreed to provide the company with $1.5 billion in cash as the electric vehicle maker looks to add new models to its product line.

Lucid ended the second quarter with cash and cash equivalents of $1.35 billion, compared to $1.37 billion at the end of 2023.

Lucid's sales and financial performance did not meet initial expectations due to higher costs, slower-than-expected demand for electric vehicles, and the company's marketing and awareness issues.

Lucid shares are down 22% this year. The stock closed Wednesday at $3.28 per share, up less than 1%. The company's market capitalization is $7.6 billion. There were 2.32 billion shares outstanding.