As it stands, the Bloomberg report on Jan. 11 was pretty specific. DD. But there’s a lot we don’t know about the transaction yet, so this is very back of the envelope stuff. That's changed recently with a lot of SPACs immediately trading at a premium to cash in trust. They’re also subject to a lock-up lasting at least six months. (Bloomberg Opinion) -- Lucid Motors Inc.’s plan to go public by merging with Michael Klein’s special purpose acquisition company, Churchill Capital Corp. IV, was a poorly kept corporate secret. The big winner here is Lucid’s principal shareholder, the Public Investment Fund of Saudi Arabia. As with Tesla Inc., this one also involves an electric-vehicle company. The deal value I've provided here is based on the $10 a share SPAC deal. It’s right that Klein has to work for his money because the performance of some of his other SPACs has been mixed. Most trade close to $10 at least until they’ve announced a merger, so what’s going on with Churchill? There were reports about the potential merger from credible media houses like Bloomberg… The sovereign wealth find injected more than $1 billion into the carmaker in 2018, and it owns an 85% stake. Still, even the really popular ones don't tend to trade above $20. This column was corrected to remove a reference to r/wallstreetbets. Institutional investors participating in the $2.5 billion PIPE transaction have also done very well here — on paper they’ve already more than doubled their money. ... Reuters and Bloomberg cited figures between $12 billion and $15 billion for the public value of Lucid. Bloomberg News reported last month that Klein’s SPAC is in talks to merge with electric-vehicle company Lucid Motors Inc. Lucid hasn’t begun delivering vehicles yet, or disclosed financials, but its fans think it could mount a serious challenge to Tesla and Mercedes-Benz in luxury electric cars. So far Lucid has received a modest 7,500 reservations for its first model, an attractive and technologically advanced luxury sedan called the Lucid Air. Join our, Shares in Churchill Capital II, which is merging with, Shares in Multiplan Corp., another Klein transaction, have fallen 25% below the $10 price at which his Churchill Capital Corp III first sold shares. And what of Michael Klein and Churchill? The news caused a 50% rise in CCIV… Retail investors are driving Churchill’s shares higher, possibly in combination with opportunistic hedge funds, as happened with GameStop Corp. CCIV has become one of the most discussed stocks on investor forums such as Stocktwits and a 17,000-member subreddit. Bloomberg reported the LUCID / CCIV merger on January 11th and this merger should be announced very soon. Michael Klein's $CCIV Hits SPAC Jackpot ... - Bloomberg.com It's now been over a month since Bloomberg News broke the news that special-purpose acquisition company (SPAC) Churchill Capital IV (NYSE:CCIV) was in talks to merge with Lucid … The fact that a deal with Lucid was struck at all will be a relief for all those who took a punt that Churchill would be the one to take the electric-vehicle company public. Update: Churchill Capital Corp IV (CCIV) … Bloomberg … On Jan 11, Bloomberg first reported Lucid Motors was in talks to go public via a merger with the special purpose acquisition company. But CCIV is even crazier; if you adjust for the likely sponsor promote, buying CCIV at 3.5x trust value is equivalent to investors saying the Lucid is worth >4x whatever they agree to sell to CCIV at.... and investors are saying that without having a single look at Lucid's valuation or any of their projected financials. This may pay off in the long term, as it has for Tesla, but Lucid’s near-term projected cash flows look like this: Right now its finances aren’t in tip-top condition. Merging with a SPAC gives the founders price certainty — they get to negotiate the deal value directly with the acquirer — but they still run the risk of underestimating demand for their shares. So it’s good to see that the terms of those equity awards have been amended to better align them with Lucid’s performance. Biden Should Return to Engagement With Cuba, Republicans Would Rather Lose Than Cut Deals, Elon Musk’s Other, Not-So-Secret Battery Could Help Texas. CCIV shares fell 36% in pre-market trading on Tuesday, though that still implies a valuation of almost $60 billion for Lucid, higher than Ford Motor Co.’s. Lucid says an SUV will follow in 2023. Having a $2 billion pot of cash is pretty nice but what if shareholders told you that cash is really worth about $15 billion? The PIPE investment at $15 a share implies a $24 billion equity value for Lucid. We combine Bloomberg’s global leadership in business and financial news and data, with Quintillion Media’s deep expertise in the Indian market and digital news delivery, to provide high quality business news, insights and trends for India’s sophisticated audiences. Relations between the two sides must be pretty convivial, too. I described last week how the Lucid deal might turn out to be one of the most lucrative yet for a SPAC sponsor, thanks to tens of millions of founder shares and warrants Klein and his investment partners received. This filingshows the Churchill IV sponsor owns 51.75 million shares and 42.85 million private placement warrants. When it comes to the CCIV-Lucid merger, it wasn't the usual Stocktwits, Reddit, or Twitter discussions. It will need $600 million in bridge financing until the SPAC deal closes. Rival EV maker Rivian is to look for an IPO later this year with a potential $50 billion valuation according to Bloomberg. Citi Is Still Mad About That $500 Million, The Tech Stocks Rebound Is a Dinosaur Brain Event, Texas Is the Future — If Only It Doesn't Become California. One reason tech companies have gone off regular IPOs is that they’re often mispriced. Disappoint them and they might find another electric-car company to rally behind. It sounds like a great problem to have, but it creates complications too. Those who did were playing with fire. On January 11, Bloomberg broke the news about CCIV and Lucid Motors being in talks. The sponsor shares are usually subject to lockups and vesting criteria and their capital is still at risk. But the thing that stood out in Lucid’s financial disclosures was the level of projected cash burn: It expects to consume almost $10 billion of cash in four years. Lucid’s growth doesn’t only exist in word of mouth. Both Bloomberg and the Wall Street Journal have reported the two companies are in talks. Even so, I doubt any of them is complaining. The SPAC’s $2 billion pot of cash would in theory entitle it to a roughly 17% stake in the company at the valuation Reuters reported. Nothing more or less. Ed is one of the authors of the Bloomberg rumor article. Doubtless some have taken profits already. CCIV's financial partners may own shares directly in the SPAC and PIPE, which aren't included here. The massive “pop” on the first day of trading leaves the founders feeling shortchanged. Lucid is backed by Saudi Arabia’s sovereign wealth fund. Similarly, you shouldn’t buy a stock until you know what’s under the hood. Churchill Capital IV's share price has surged more than 300% since Bloomberg News reported in January that it was in talks to merge with Lucid. Multiplan was hit with a critical report from short seller Muddy Waters. Klein and his investment partners paid about $43 million for shares and warrants that are now worth roughly $4.7 billion by my calculation. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Even after the deal closes, the PIF will still own 62% of Lucid, meaning it can influence decisions such as where it builds new factories. Readers should note … Have a confidential tip for our reporters? People are flocking to the Lone Star State, lured by ample land, big, diverse cities and a growing economy. It is also worth mentioning that Lucid has strong … Bloomberg reported at the beginning of January that the special purpose acquisition company was in talks to bring Lucid Motors public. Everyone has been posting about the connections between Lucid and CCIV, but I have been thinking about where the leak came from. CCIV and Lucid Motors' key executives are well known to each other. There are signs that a deal is near, with Reuters reporting that Lucid will be valued at about $12 billion and that Churchill has begun talks with investors about a concurrent capital-raising transaction, known as a PIPE. It won’t start production until the second half of this year, rather than the spring, as previously communicated. According to Bloomberg, such a deal could give a valuation of $15 billion for the EV maker. Based on where the SPAC shares are trading, shareholders believe Lucid is worth about seven times as much. CCIV's stock price has risen rapidly since the Bloomberg report on 1/11/21 of CCIV being in talks to merge with Lucid Motors. Finally, consider the lucky participants in the concurrent $1 billion-plus capital raising (PIPE) transaction that Churchill is reportedly considering. Also Greensill, Robinhood, Blockchain City, Monolithic Power Systems and copper theft. Lucid is going the traditional route. A consortium led by Venrock Associates proposed to sell Lucid Motors Inc to Churchill Capital Corp IV. It was imprudent, however, for retail investors to bid up the SPAC shares to as much as $60 before the deal terms were announced. It’s built a small plant in Arizona, and faces a mounting bill to add factory capacity, develop technology and build a network of sales and service outlets. This is essentially what’s happened to Churchill Capital Corp IV, the largest of Michael Klein’s seven special purpose acquisition companies. To me, $12 billion already seems a lot for a pre-revenue company, albeit one whose first model — the Lucid Air — is pretty desirable and whose British Chief Executive Officer Peter Rawlinson led the engineering for Tesla’s Model S. The implied valuation, however, is far higher. That far exceeds the $4.4 billion Lucid will receive from the SPAC and a concurrent PIPE financing — a type of equity funding open only to accredited investors. What’s strange in Lucid’s case is that the pop has happened before a deal has even been signed. Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. Yesterday, Lucid Motors finally announced its official reverse merger with Churchill Capital Corp. IV (CCIV), a special acquisition company (SPAC). Lucid has an experienced team of executives but for now it’s operating in a small and increasingly competitive niche — luxury electric sedans. Report of Lucid Merger With CCIV Lucid was founded in 2007 as Atieva by former Tesla TSLA +0.4% executive Bernard Tse and entrepreneur Sam Weng. This time he and the PIF are on opposite sides of the negotiating table, but neither gains if the SPAC’s shares collapse. This is actually almost exactly the same thing as Pitchbook rumor about this page, that caused many retail investors to go headfirst and buy CCIV stock. First off, Lucid can’t be sure how “real” this investor enthusiasm is. According to Bloomberg, Lucid Motors Inc was in talks with Michael Klein’s SPAC and the transaction could be valued at up to $15 billion. Gambling doesn’t always pay. Before it's here, it's on the Bloomberg Terminal. To contact the author of this story:Chris Bryant at [email protected], To contact the editor responsible for this story:James Boxell at [email protected]. The company’s job listings (not shown) grew from 189 in July 2019 to 634 today, showing that the company is hoping to significantly staff up ahead of and after the release of the Lucid Air.  If Churchill follows the typical SPAC approach, it would split those returns three ways: a third to its financial partners, a third to members of Churchill’s brain trust (people like former Apple design boss Jony Ive and former Ford Motor Co. CEO Alan Mulally), and a third to Klein’s firm M. Klein & Co. Investors pulled back on CCIV shares following the announcement. Bloomberg reported the news and is a highly reputable source. 1) JAN 11 — BLOOMBERG POST of $CCIV & LUCID MOTORS- History states that it takes about 20 days after Bloomberg predicts a merger for a company to announce it. Klein, a former Citigroup Inc. rainmaker who’s raised about $7 billion across his SPACs, is an unlikely hero for amateur investors. Churchill Capital Corp (NYSE:CCIV) stock was lively in after-hours trading on Thursday, following Bloomberg Terminal preliminary news release of a possible agreement between a consortium led by Venrock Associates and Churchill Capital Corp IV. Klein will use Churchill Capital Corp IV (CCIV), his largest SPAC that has raised more than $2 billion, for the transaction, the people said. Amateur investors have crowded into Klein’s SPAC in the hope of backing the next Tesla Inc. 2. For instance, Bloomberg reported that weekend that a deal was near, ... And so the $64 peak of CCIV stock valued Lucid Motors (all of Lucid Motors) at a stunning $102 billion. As Tesla’s many successful capital raisings have shown, it helps to have a sky-high valuation but it’s imperative to keep retail investors sweet. The biggest potential problem is that the more the Churchill price rises, the more Lucid will be tempted to renegotiate the terms of the deal, which might cause the SPAC’s price to fall, thereby burning the retail crowd. There are plenty around. As per the Bloomberg terminal, a consortium of investors, led by the VC firm Venrock Associates, is negotiating a sale of its Lucid stake to Churchill Capital. SPACs are listed vehicles used to acquire promising companies, thereby taking them public. Bloomberg News reported last month that Klein’s SPAC is in talks to merge with electric-vehicle company Lucid Motors Inc. Lucid hasn’t begun delivering vehicles yet, or disclosed financials, but its fans think it could mount a serious challenge to Tesla and Mercedes-Benz in luxury electric cars. Bloomberg reported on Monday that Churchill, a SPAC formed by former Citigroup executive Michael Klein, is close to a deal to take Lucid Motors … It also plans to offer energy storage equipment. If it wanted, the carmaker could push for better terms — such as a smaller stake for Klein’s SPAC — or walk away and do a regular IPO at a much higher valuation. I doubt that’s going to happen, though. What Happened: Lucid Motors, rumored to be landing a SPAC deal with Churchill Capital Corp IV CCIV 0.02% since January, is close to a deal, according to Bloomberg. According to Bloomberg, “Atieva … Still, it’s an astonishing jump in value. Lucid Motors and the SPAC Churchill Capital Corp. IV (CCIV) May Announce a Merger Agreement by the 23rd of February – the Deal May Value the EV … 3 Bloomberg | Quint is a multiplatform, Indian business and financial news company. Its valuation could tumble if frothy market conditions change: Tesla’s shares are already 10% below their peak. Shareholder democracy, eh? The information or a page on Bloomberg Terminal dedicated to CCIV/Lucid Motors merger is a simple, semi-automated message created off of this article. According to Bloomberg, … In a world where Chinese carmaker Nio Inc. is valued at $85 billion despite delivering fewer than 50,000 electric vehicles annually, and Tesla’s market capitalization is $750 billion, it seems that anything goes. He previously worked for the Financial Times. Lucid’s high valuation allows it to raise capital and list shares in New York without diluting the Saudis too much. Based on 1.6 billion pro forma shares outstanding. They’ve become the dominant way for a company to raise equity finance in the U.S. — well over 200 new blank-check companies have raised a mind-boggling $70 billion so … But some of the latest crop, such as Fisker Inc., have sought to cut their need for capital by outsourcing manufacturing and engineering. CCIV - Bloomberg Writer Connection to Lucid. He previously worked for the Financial Times. Then there are hedge funds like Millennium Management LLC, Karpus Management Inc. and Citadel Advisors LLC who’ve made huge paper gains while taking no risk. Even though the graphic suggests that Lucid is receiving slightly faster and more reservations than Tesla back in the day for the Model S, we just want to point out that Lucid is completely fine with 7500+ reservations (some people say Lucid's numbers should be compared with the Cybertruck, which doesn't make much sense). Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. CCIV shares fell 36% in pre-market trading on Tuesday, though that still implies a valuation of almost $60 billion for Lucid, higher than Ford Motor Co.’s. They did so before knowing the terms of the proposed transaction or the state of Lucid’s finances. Lucid’s company statements include an “explanatory paragraph relating to Lucid’s ability to continue as a going concern,” the slide deck notes. Apparently, Lucid Motors, another electric vehicle manufacturer, is considering going public via CCIV stock in … With Churchill, Lucid is guaranteed to raise at least $3 billion of capital. So far Lucid has received a modest 7,500 reservations for its first model, an attractive and technologically advanced luxury sedan called the Lucid … Shares in Multiplan Corp., another Klein transaction, have fallen 25% below the $10 price at which his Churchill Capital Corp III first sold shares. He’s more discreet than rival SPAC star Chamath Palihapitiya, but can the Reddit romance last? Many critics say that CCIV is now very over-priced. CCIV, the ticker by which the former Citi banker’s SPAC is known by Redditors and other retail fans, is at the center of the stock market’s latest bout of speculative mania. Those shares now trade at $58, even before the SPAC has agreed a takeover or said what the terms of a deal might be. And while Lucid is shaping up as one of the most lucrative SPAC deals so far, retail investors — as usual — aren’t the ones in line to make the truly big bucks. To keep thriving, a new pragmatism is needed. Retail investors wouldn’t benefit as only accredited investors get to participate in PIPE deals. Lucid and CCIV note that the PIPE deal comes with an investor lock-up provision. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. And yet, the luxury electric-car start-up still delivered a few surprises when the $11.75 billion transaction was announced on Monday. It’s bound to face manufacturing and other challenges, as Tesla did. After weeks of speculation, a deal to take Newark-based Lucid Motors Inc. public reportedly could be announced as early as Tuesday. There's also a large PIPE to fund the deal. “I'd assume the $10 PIPE financing will be the most competitive deal of all time,” Julian Klymochko, CEO of Accelerate Financial Technologies Inc., which manages a SPAC-focused ETF, told me. Lately, there’s been a big pop whenever SPAC deals involving electric-vehicle companies are announced. ... in the end very few will be relevant, Lucid (CCIV) is no Tesla BUT they've been in the EV game for a while. The … Instead of putting money in at $10 a share, as happens with most PIPE transactions, BlackRock Inc., Fidelity, Franklin Templeton and others will pay $15. First, consider the sponsor. Investors who bought the rumor are now selling on the news. Churchill Capital IV raised a bit more than $2 billion in an initial public offering last summer by selling shares for $10 a piece, the standard price for most blank-check companies. Multiplan was hit with a. It’s customary to price such deals at $10 a share, too, so if that happens the buyers would immediately realize huge paper gains because the SPAC’s share price is now $58. After some digging, I discovered a strong connection between Ed Ludlow and Lucid. A portion of Churchill’s equity awards won’t vest unless various share price targets are met and all are subject to an 18-month lock-up. Hedge funds often snap up SPAC units (shares plus free warrants) because they offer downside protection: Until a SPAC completes a deal, investors can redeem their shares and get their cash back. High cash burn is often a problem for new entrants to the automotive industry — just ask Tesla Inc. or NIO Inc. Lucid’s biggest shareholder is Saudi Arabia’s Public Investment Fund, and Klein is one of the kingdom’s most trusted financial advisers, having helped steer the listing of Aramco. Shares in Churchill Capital II, which is merging with digital-learning company Skillsoft Ltd., are trading close to $10, a level that might cause some of that SPAC’s investors to redeem their holdings for cash rather than fund the proposed transaction. However, their free lunch isn’t quite as big as I’d anticipated. Bloomberg first reported on the talks about six weeks ago. Bloomberg news on CCIV Lucid motors of possible merger announcement on Tuesday February 22nd. Not all of them were pleasant. But Lucid and Churchill haven’t confirmed any of that yet, so investors bidding up the SPAC’s shares are taking a punt. Most people wouldn’t splash out on a car without viewing the vehicle and reading the full spec. Churchill Capital’s CCIV stock and Lucid merger rumors On Jan. 11, Bloomberg reported that Churchill Capital was in talks to take Lucid Motors … 1, Shares in Michael Klein's SPAC have surged on hopes it will merge with Lucid. Arbitrage hedge funds and others who bought CCIV shares at $10 have enjoyed huge gains. Almost 240 million shares have changed hands in the last three trading sessions — remarkable considering only 207 million shares are tradable. Despite the big potential payday, the former Citi rainmaker can’t be entirely comfortable with the way shares in Churchill Capital IV have surged. Read More: Lucid SPAC Gives Up Some of Giant Gain After Pact Confirmed. Investors had been anticipating the deal since Bloomberg reported in January that the two companies were in talks to merge. You’d imagine some arbitragers have already cashed in some of their Churchill profits. Lucid Motors and blank check company Churchill Capital IV (CCIV) confirmed a merger deal to take the California-based EV company public. The tail has been bitten, but the signal hasn't reached the control center yet. Putting an end to the rumors, Lucid Motors is merging with Churchill Capital IV (CCIV) valuing the revenue free electric vehicle company at $24 billion. Missing BloombergQuint's WhatsApp service?
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