Small-time investors in Lucid Group Inc. are about to learn the hard way what it means to have too much of a good thing.
Lucid is an electric vehicle startup that debuted on the stock market last month by merging with a shell company (Churchill Capital IV) that’s already listed. The SPAC raised money in a 2020 public offering and sweetened the deal by giving investors warrants exercisable at $11.50 each for a share. The warrants were initially offered with a five-year expiration. The SPAC’s sponsor warrants were good for 18 months.
With Lucid hovering around $21.70, investors could almost double their money right now. Lucid wants to redeem the warrants and could raise as much as $500 million by calling them.
But with demand for more environmentally-friendly vehicles only expected to grow, who knows where the EV maker’s stock could be in five years? Read more.
