Lucid Group, electric vehicle builder in Arizona, sees shares slide after SEC subpoena disclosure

Dec 6, 2021, 5:00 PM | Updated: 6:06 pm
(Facebook Photo/Lucid Motors)...
(Facebook Photo/Lucid Motors)
(Facebook Photo/Lucid Motors)

SILVER SPRING, Md. (AP) — Shares in the electric vehicle startup Lucid Group, which builds electric vehicles at a factory in Casa Grande, tumbled Monday after saying that said it had been subpoenaed by government regulators, apparently over the process by which it became a publicly-traded company last summer.

Lucid shares skidded 18% at the opening bell and they were down 9% near midday at $42.75.

In a filing with the Securities and Exchange Commission, the California company said an investigation by the SEC “appears to concern the business combination between the company and Atieva Inc. and certain projections and statements.”

Lucid, formerly known as Churchill Capital Corp. IV, began trading on NASDAQ in July after combining with Atieva, a so-called special purpose acquisition company. Commonly referred to as a “SPAC,” they are used as a shortcut to go public, bypassing the lengthy and costly process of a traditional initial public offering.

SPACs — also called “blank-check companies” because they have no real business other than hunting for privately owned businesses to buy — exploded in popularity last year, and the furor reached a fever pitch early in 2021 when they were raising an average of $6 billion every week. SPACs offer investors a way to get into those exciting, potentially high-growth companies or companies or industries, and few sectors are as hot lately as electric vehicle makers.

Companies going the SPAC route often feel more license to highlight projections for big growth they’re expecting in the future, for example. In a traditional IPO, the company is limited to highlighting its past performance, not necessarily the greatest selling point for young startups that have little to show for in sales or profits.

Before the steep selloff Monday, Lucid had a market capitalization of nearly $78 billion, in the same neighborhood of Detroit stalwarts GM and Ford. Electric Truck maker Rivian, which has only delivered a few hundred vehicles, passed Ford in valuation on its first day of public trading last month with shares soaring past $100.

The Lucid investigation is the latest setback for the electric vehicle sector, which saw top executives for Lordstown Motors step down in June after a critical report from short-selling firm Hindenburg Research which questioned the number of preorders the company claimed to have received for its marquee Endurance vehicle. Shares in Lordstown, which also went public through a SPAC, are down 80% this year.

Shares in electric and hydrogen-powered truck startup Nikola are down more than 40% this year after allegations of fraud, again coming from Hindenburg Research. Nikola’s founder Trevor Milton resigned in September after the Hindenburg report called Nikola’s success “an intricate fraud” based on “an ocean of lies.” Milton’s resignation came just two weeks after signing a $2 billion partnership with General Motors.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

Hilda McGready...

Silver Alert cancelled for 85-year-old woman who drove off from Arrowhead Mall in Glendale

A Silver Alert was cancelled Sunday for an 85-year-old woman with dementia who drove off from the Arrowhead Mall in Glendale, authorities said.
22 hours ago
WASHINGTON, DC - JANUARY 19: Sen. Kyrsten Sinema (D-AZ) walks to her office in the basement of the ...

Weekend wrap-up: Here are the biggest Arizona stories from Jan. 21-23

Arizona Sen. Kyrsten Sinema being censured by the state’s Democratic party is among the biggest Arizona stories of the weekend.
22 hours ago
Barry Markson (Twitter photo/BarryMarkson1)...
Mike O'Neil/The Think Tank

Think Tank talks with practicing attorney and KTAR host Barry Markson

Practicing attorney and sometimes KTAR News 92.3 FM host Barry Markson joins this week's Think Tank to discuss his take on Biden’s recent speech and other topics.
22 hours ago
(Pexels Photo)...
Wills Rice

Storm brings rain, strong wind gusts to metro Phoenix Saturday night

A storm rolled through metro Phoenix Saturday night, bringing rain and wind across the Valley.
22 hours ago
A Valley Metro Rail train drives through downtown on March 26, 2020 in Phoenix, Arizona. Despite fe...

Phoenix receives $920K for 5-mile streetcar route development in Mesa

The city of Mesa on Friday received a $920,000 grant to manage the planning of a 5-mile streetcar route that would connect four activity centers within the municipality.
22 hours ago
(Phoenix Police Department Photo)...

Phoenix police seek public’s help in identifying suspects who shot 2 teens in December

The Phoenix Police Department is seeking the public's assistance in identifying three suspects who shot two 15-year-old teens in December.
22 hours ago

Sponsored Articles

Day & Night Air Conditioning, Heating and Plumbing

HVAC upkeep in Arizona saves money, keeps families prepared in the long run

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.
Arizona State University

Gain insights on next year’s trends at 58th Annual Economic Forecast Luncheon

Employment is recovering from the severe contraction induced by the pandemic, but it is still way below levels at the start of 2020. Can it fully recover in the coming year?

What you need to know about spine health

With 540 million people suffering from lower back pain, it remains the leading cause of long-term disability. That’s why World Spine Day on Oct. 16 will raise awareness about spinal health with its theme, BACK2BACK. “BACK2BACK will focus on highlighting ways in which people can help their spines by staying mobile, avoiding physical inactivity, not overloading […]
Lucid Group, electric vehicle builder in Arizona, sees shares slide after SEC subpoena disclosure