![]() ![]() ![]() It doesn't happen all the time, but if a SPAC announces a particularly good deal in a particularly buzzy sector, the stock will generally race. Now, there's nothing completely insane about a SPAC trading for a huge premium to trust. CCIV is currently trading at ~$35/share, so shareholders are valuing it at 3.5x trust. Like most SPACs, it has $10/share in trust (cash in the bank shareholders can redeem if they don't like CCIV's deal). However, the stock exemplifies the bubble so well currently that I wanted to risk a little bit of dating and put this post together now.ĬCIV is a pre-deal SPAC. It's entirely possible Churchill announces a merger tomorrow morning, which would make this post slightly stale. Note that I am writing this on Sunday, Feb. So today I wanted to dive a little into Churchill Capital Corp IV (CCIV), because I don't think there's ever been a stock that so clearly exemplifies a bubble and, while some people have discussed how wild it is that CCIV is trading at a premium, I don't think people fully realize just how crazy it is for CCIV in particular to trade at this big a prmium. It's easy to say, "O that's a speculative bubble," but it can be hard to point to any one company or stock that actually exemplifies the bubble. ![]() I think there's clearly a SPAC bubble going on right now, and one of my predictions for 2021 is that the bubble will break towards the back half of the year as the pure number of SPACs outstanding overwhelms the speculative capital available and a couple of SPACs start to fail because they simply can't find public ready companies. I’m a great believer that the first product defines the brand in way Tesla model S defined Tesla as a brand,” said Lucid CEO, Peter Rawlinson.I have spent a lot of my time this year looking and thinking about SPACs. “I think it’s really important that we start at a high-end position as a true luxury brand. The electric vehicle maker is backed by Saudi Arabia’s sovereign wealth fund, so it is not a surprise they are targeting the wealthier people. The company aims to meet production goals for of its most expensive vehicle, the Air Dream Edition this year. Lucid Motors has built a factory in Arizona with a capacity of 34,000 cars per year. Former Tesla executive Bernard Tse co-founded Lucid in 2007. Investors had been waiting for a possible Lucid Motors/CCIV deal given that Lucid competes with the EV giant Tesla, whose stock has risen some 600% over the past 11 months. “CCIV believes that Lucid’s superior and proven technology, backed by clear demand for a sustainable EV, make Lucid a highly attractive investment for Churchill Capital Corp IV shareholders, many of whom have an increased focus on sustainability,” CCIV Chairman and CEO Michael Klein said in announcing the deal. The transaction values Lucid at an initial pro-forma equity value of approximately $24 billion at the PIPE offer price of $15.00 per share and will provide Lucid with approximately $4.4 billion in cash, according to markets reporter, Ines Ferré. Shares of Churchill Capital jumped as much as 28% after the news was announced on Monday evening, February 22. Capital IV and Lucid Motors Churchill confirmed a merger deal to take the California-based EV company public. ![]()
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