Lucid Group Rally on Heavy Volume After Majority Shareholders Invest $1 Billion

Lucid Group Inc.'s stock surged by 16% on Monday following the announcement from the electric vehicle manufacturer that its majority stockholder is set to purchase $1 billion worth of its stock, a move that stands out amidst challenges faced by other EV companies.

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Lucid Group (LCID) disclosed that Ayar Third Investment Co., based in Saudi Arabia and affiliated with the Public Investment Fund, the Saudi sovereign wealth fund, has agreed to acquire $1 billion worth of a new series of convertible preferred stock through a private placement, subject to customary closing conditions.

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During early trading, Lucid's stock witnessed robust activity with nearly 8 million shares changing hands. This figure contrasts with its average daily volume over a 65-day period, which stands at approximately 36 million shares.

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According to the company, the proceeds from the private placement will be utilized for general corporate purposes, including but not limited to capital expenditures and working capital.

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Lucid Group, headquartered in Newark, California, is gearing up for the launch of its Gravity sport-utility vehicle later this year.

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Despite this positive development, Lucid Group's stock has experienced a decline of approximately 25% since the beginning of 2024, reflecting a cooling interest in electric vehicles recently.

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Mizuho downgraded Tesla Inc. (TSLA), Nio Inc. (NIO), and Rivian Automotive Inc. (RIVN) on Monday, citing weaker demand for EVs and downward pressure on prices.

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In contrast, Fisker Inc.'s stock (FSR) saw a modest increase of 1% despite the EV maker's acknowledgment that negotiations with an undisclosed car manufacturer had reached an impasse.

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