Breaking news, folks! Lucid Motors (NASDAQ: LCID) is back and better than ever! The electric vehicle company made a massive comeback at the end of January, fueled by rumors of a potential buyout by Saudi Arabia. Although the stock has cooled off a bit, I’m here to tell you that this buyout scenario is far from fantasy. A multi-billion dollar offer could be a game-changer for both Saudi Arabia and existing shareholders. Just think about it, stock prices soar when buyout rumors surface, and that’s exactly what happened with Lucid Motors, with its market price skyrocketing by over 40% at the end of January. But why would a buyout make sense for Saudi Arabia’s PIF? Well, let me tell you. First off, the PIF already holds a controlling stake of 61% in Lucid Motors, and has been a major contributor to the company’s growth, funding much of its R&D, manufacturing facilities, and current production ramp-up. It only makes sense for the PIF to fully control the upside and acquire 100% of Lucid Motors’ outstanding stock. Second, Saudi Arabia plays a crucial role in Lucid Motors’ manufacturing footprint and is critical to the company’s global expansion plans. Lucid Motors signed a deal with the Saudi Ministry of Investment and other entities to build its first production facility outside of the US in the country. The facility, AMP-2, has an estimated annual capacity of 155K electric vehicles. Now, with more than a third of Lucid Motors’ float being shorted, a formal buyout offer could trigger a rush to the exits, with short sellers trying to close out their positions. Marketbeat reports that as of January 15, 2023, 165 million shares of Lucid Motors had been shorted, making for a 34.3% short ratio. With Lucid Motors’ sales expected to surge in 2023, reaching $2.57 billion, the EV company is well-positioned for a production boost in the coming year. Although still in its early stages of development, Lucid Motors’ potential in the EV market, with 34K reservations as of November 2022, makes for a compelling investment opportunity. As we await Lucid’s Q4 earnings call on February 22nd, investors are advised to keep an Overweight (i.e. Buy) rating, with a price target of $18, which could result in returns of ~118% in a year. The analyst community is divided, with a Hold consensus rating based on 3 Buys, 2 Holds, and 3 Sell ratings. Buckle up, folks, it’s going to be a wild ride!
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Disclosure: This video was done by myself, and it expresses my own opinions. This is not investment advice or financial advice and it should not be taken as investment advice or financial advice in any way shape or form. I am not receiving any form of compensation for this video from the company or organization that I am expressing opinions about. This video is for entertainment and or educational purposes only.
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