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Lucid Group stock rallies after Nasdaq Tech 100 inclusion

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Yahoo Finance's Pras Subramanian discusses Lucid Group stock being up after being added to the Nasdaq Tech 100 and Rivian winning an award for best truck.

Video Transcript

KARINA MITCHELL: Well, Lucid is making a big move rolling onto the NASDAQ 100 next week. Here to discuss how it got there-- our "Yahoo! Finance"'s Pras Subramanian.

PRAS SUBRAMANIAN: Hey, Karina. So every year around this time, the NASDAQ rejiggers its NASDAQ 100 index, which is the top tech firms out there. And they have to do this because of market capitalization changes and things like that. So added to the group today is Lucid. Big move for the company, because when you're added to that NASDAQ 100 index, a lot of firms, both passive and active, are sort of monitoring that as their way of-- they're trying to basically mirror that index for their fund points. Excuse me.

So what they're going to do is, they're going to have to add Lucid shares to these funds. And that increases the value of the shares, and increases the liquidity amount that's out there. And then it gives the shares a boost in case they ever need to sort of raise money by offering new shares. You can have that basic floor there, because of the fact that index funds have to keep buying and tracking that. That's a big deal for the company.

And it really couldn't come at a better time, because of the fact that the company is struggling with a couple pieces of bad news-- most recently, the SEC investigation into their merger with SPAC, their blank-check company Churchill Capital IV. The SEC is investigating projections and statements, and things like that. Also, they had a recent offer of a convertible debt offering. So that was weighing on [INAUDIBLE].

This is good news for them. You know they actually just won the MotorTrend Car of the Year. CEO Peter Rawlinson talked about the fact that they want to introduce a 70,000 or cheaper Air sedan. So a lot of good stuff happening. And maybe 2022 is a good kind of start for the company as they enter their full first year of production.

KARINA MITCHELL: Yeah, speaking about awards, I know one of its competitors, Rivian, its EV truck was just voted best truck by MotorTrend. That's some serious bragging rights

PRAS SUBRAMANIAN: Yeah, that's right. You know, I just mentioned that Lucid Air just won the MotorTrend Car of the Year. This one, the Rivian R1T, won the Truck of the Year. Not just EV Truck of the Year, it won overall Truck of the Year. And this is a big feather in the hat of Rivian, if you think about it. Because this is a very prestigious award to win for competing against traditional truck makers like Ford, Chevy, and Ram Trucks.

And MotorTrend particularly said the R1T changed the way that people can build a truck, and new ways to think about truck design, engineering, and use cases. So it's really just a mix of them talking about the capability, the novelty, materials, engineering, and even value as a luxury adventure truck, you know, because it can actually do the work truck activities that these trucks are known for. It's comparable towing and payload-- in this case 11,000 pounds-- you can tell it's pretty impressive.

And actually, the award season isn't done yet, Alexis. The big one is the 2022 North American Truck of the Year Award, and Rivian is a finalist. You know, I'd love to get my hands on it-- have myself and Rick Newman test out the Lucid Rivian. Because we want to-- I'm sorry, Rivian truck --because we want to see, really, how does it stack up against these traditional trucks we've all driven for many years.

KARINA MITCHELL: All right. Pras Subramanian from "Yahoo! Finance," thank you so much for that report.