Why did Lucid’s Stock Drop 10% on Wednesday?

On Wednesday, Lucid Motors (LCID) shares fell more than 10% to $17.79 a share. A lockup period for some of the electric vehicle company’s major investors had ended, putting pressure on the price.

For the first time since Lucid went public via a SPAC in July, PIPE shareholders (private investment in public equity) are able to sell. During Wednesday’s session, shares plunged as much as 19 percent, reaching their lowest level since being listed on the Nasdaq.

Saudi Arabia’s government wealth fund, BlackRock funds, Fidelity Management & Research, and Franklin Templeton are all investors in Lucid.

Traders had been keeping an eye on the company even before it announced its intention to go public. In February, the blank check company it merged with, Churchill Capital IV, became popular among retail traders. Following news of the impending merger, the SPAC’s stock soared by 30%.

Image Source: Yahoo News

On July 26, Lucid and Churchill Capital IV completed their merger and began trading under the ticker symbol LCID. LCID closed at $26.83 on that day.

In the electric luxury sedan market, Lucid Motors is considered as a potentially serious competitor. Prior to joining Lucid in 2013, Peter Rawlinson, the company’s CEO and CTO, was the model S’s chief engineer at Tesla (TSLA).

The electric vehicle manufacturer established its first manufacturing facility in the United States in Casa Grande, Arizona. The business hopes to reach its targets for two variants of the Air Dream Edition, its most expensive vehicle, this year.

Lucid established a showroom on June 26 in New York City’s famous meat packing district, just a few blocks away from Tesla’s.

Source: Yahoo News

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