Lucid Group Inc. is raising about $3 billion in a common stock offering with the majority of the money coming from the electric vehicle maker’s Saudi owners after a more than 60% stock slump in the last year. The shares plunged more than 7% in extended trading.
The company announced the raise along with a corresponding investment by its owners — Saudi Arabia’s Public Investment Fund — in a statement, confirming an earlier Bloomberg News report. PIF, the kingdom’s largest sovereign wealth fund, is purchasing $1.8 billion of the stock in a private placement.
The fund already owns about 60% of Newark, California-based Lucid, according to data compiled by Bloomberg. Bank of America Corp. is acting as the sole book-running manager for the public offering.
“Lucid intends to use the net proceeds from the public offering, as well as from the private placement by its majority stockholder, for general corporate purposes,” the company said.
PIF first invested in Lucid in 2018, and steadily accumulated more shares until it held a majority ownership when the startup went public in 2021 through a combination with a special purpose acquisition company. Shares of the EV maker jumped in January amid unverified rumors that PIF was preparing a buyout.
The shares fell 7.4% to $7.19 at 5:11 p.m. in extended New York trading after the report of the stock offering.
Read More: Lucid Sees EV Production Toward Low End of Full-Year Target
Lucid has stumbled recently as it grapples with heavy costs, production challenges and competition in the EV market. The company said in March that it would eliminate about 18% of its workforce. This month it guided toward the low end of its annual production plan following a slow start the year.
The company has been trying to break out from a crowd of would-be Tesla Inc. competitors and firmly establish itself in the EV market. Its market capitalization had briefly eclipsed $90 billion during the market frenzy in 2021 and has since fallen to about $14 billion.
--With assistance from Sean O'Kane.
(Updates with company statement, shares starting in first paragraph.)