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Lucid stock falls amid talks of potential buyout from the Saudi Arabian Investment Fund

Lucid shares fall after initially rising on talks of a possible buyout from the Saudi Arabian Investment Fund.

Video Transcript


- All right, let's take a look at some of the big movers of the day, and take a look at Lucid because this stock has been on a wild ride over the past two trading days, Lucid closing off just over 8% today, still up about 30% when you factor in today's trading action and Friday's trading action, the two-day jump coming on the heels of news that Saudi Arabia's public investment fund will potentially want to buy out the rest of the EV maker's shares here.

Saudi Arabia's fund already owns about 60% of Lucid, a lot of excitement following that speculation, those reports, Dave, on Friday coming back down just a bit, giving up some of those gains today. But I think the big question here going forward with Lucid is what this company is going to look like given the broader macroeconomic landscape right now, given the competition from Tesla, given the fact that the price cuts placing even more pressure on a name like Lucid. You're scratching your head here, really, trying to figure out what this company looks when you move forward.

- Yeah, I don't know how much they're impacted by those price cuts. This is a much more expensive end of the segment. You're talking about the cheapest Lucid car, $87,000, and most of them priced well north of $100k. So it's a very different consumer. But Morgan Stanley did say they are impacted by what they call the Hunger Games pricing war, which is pretty descriptive, but that stock just a wild ride Friday, 43% climbing, was halted 12 times.

I think they really do need that Saudi acquisition. Although the Saudi fund did not comment, and Lucid did not comment, it sounds as though that has not been squashed. It sounds like it is still a distinct possibility out there and something they desperately need, because to your point, fundamentals of this company, a record 3,500 cars produced in Q4, for 3,500. They squandered whatever first mover advantage they had over Tesla. And it seems like-- I know we're in the early innings of the EV game. But when you don't take advantage of that first mover advantage, it seems like it can get dark really early.

- Yeah, exactly, and especially right now, just given that broader economic landscape, a shrinking consumer wallet clearly an issue here for Lucid for Rivian, some of those cars that are so expensive, like you said. Wall Street seems to be a little bit mixed. We had a number of price targets cut in the week or so leading up to this report on Friday. Morgan Stanley lowered its price target to $5 a share. CFRA lowered their price target to $12 a share. So we'll see whether or not this deal, in fact, does go through.