Is merger with Lucid Motors a clear win for CCIV?

Investors in emerging EV games have probably already factored in Churchill Capital (CCIV), the company that will go public with Lucid Motors this year. This SPAC merger is one of the most anticipated of the year and is generating a huge amount of investor enthusiasm among those looking for a real rival to the current incumbent Tesla (TSLA).

Lucid’s flagship EV product, the Lucid Air, brings a level of luxury and style to the EV market reminiscent of Tesla’s Model S. When many investors first saw the Model S, the thought that probably crossed my mind was ” that’s an EV I’d buy it.” Indeed, Lucid’s product quality, design, and feel are one of the main reasons investors and consumers flock to this game today.

However, the question remains whether CCIV shares will remain a solid buy ahead of the future merger, or whether investors will have to wait and see what LCID shares will be. (See CCIV stock charts on TipRanks)

Let’s take a look.

CCIV Shareholder voting and anticipation of mergers imminent

One of the most important things CCIV stock investors will be looking at this week is the voice of the company’s shareholders. the SPAC merger, which is scheduled for July 22. Given that the shareholder vote is only days away, it’s understandable that anticipation is mounting again for this young EV player.

In addition to announcing the shareholder vote, Churchill made it clear that the company will announce a board filled with top executives from the financial and automotive sectors. These announcements did little to boost CCIV stock ahead of the merger vote, with CCIV stock losing 12% of its value last week alone.

That said, this week could be a big one for investors. Should the merger be approved, this is an EV game with the potential to make a serious rebound in the near term. At the moment, it seems the market is happy to sell the news, then wait for the dust to settle before making a judgment on this stock. For aggressive growth investors willing to speculate about the optimism that reigns this week and next, now may be a good starting point to consider CCIV stocks.

Should the merger be approved by investors (which it likely will), CCIV will stop trading and the shares will convert to LCID, which will begin trading on the NYSE on July 23.

Shareholder meeting offers little optimism for Lucid

Interestingly, Churchill and Lucid held a shareholders’ call last week to discuss updates ahead of this week’s merger vote. Prior to the call, the company filed its slide deck with the SEC, leading to an almost immediate sale of this stock.

Frankly, this selling pressure was a bit of a surprise. The company reiterated its aggressive growth targets, including a target of 20,000 units by 2022, rising to more than 250,000 vehicles per year by 2026. However, it seems the market expected more from this presentation.

In addition, pre-order data shows that the Lucid Air has more than 10,000 existing pre-orders. For a company likely to produce just a few hundred this year, the demand for 2022 appears to be strong. Indeed, how this vehicle performs and the company’s ability to market to a broader base remain important questions for investors at this point. After all, a run rate of 250,000+ vehicles in 2026 and beyond is an aggressive target. That is, since the company’s pre-production run of just 89 vehicles has just been completed, investors are currently working with a small sample size from which to extrapolate.

Lucid announced a few other interesting points that might intrigue investors. First, the company’s energy storage system prototype appears to be making positive progress. In addition, Lucid announced that the company would be putting forward a significant amount of Capex to help accelerate production. If these investments prove lucrative for investors, it’s possible we could see momentum building in CCIV/LCID stocks from here.

What Analysts Are Saying About CCIV Stocks

according to TipRanks smart score, which represents a compilation of sentiments about the stock, Nano Dimension earns a 4, or Neutral, rating. That means the stock is likely to perform in line with overall market performance.

Bottom Line on CCIV

Investors in high-growth EV stocks like the story behind Lucid Motors. This is a company proposing an alternative to the established Tesla in the luxury EV space. Given the growth rate we’re likely to see in this segment over time, Lucid certainly looks like a company with an opportunity to give Tesla a run for its money in this segment.

That said, this is still an early stage business that investors are betting on. If everything goes perfectly on schedule and on budget, Lucid Motors just might be a “Tesla-esque” opportunity from here on out. However, with so many unknowns in the EV space right now, it seems investors are content to sit on the sidelines for now.

Disclosure: Chris MacDonald had no position in any of the stocks mentioned in this article at the time of publication.

Disclaimer: The information in this document is for informational purposes only. Nothing in this section should be construed as a solicitation to buy or sell securities.