Special purpose acquisition company (SPAC) Churchill Capital IV CCIV> has one primary purpose: to bring luxury electric vehicle manufacturer Lucid Motors to the markets. And if you’d like to own a stake in a truly unique automaker, I suggest that you consider CCIV stock.
Lucid Motors’ first car, known as the Lucid Air, is a luxury sedan that features a California-inspired design and race-proven automotive technology.
These cars are not only electrified, but sleek and fast. Apparently, select models of the Lucid Air are expected to be capable of going from zero to 60 miles per hour in 2.5 seconds.
Unfortunately, CCIV stock hasn’t achieved much speed or distance in recent months. But like the Lucid Air, the stock may be poised for acceleration – and perhaps a fair measure of disruption, too.
A Closer Look at CCIV Stock
Before we peer into the future, we have to acknowledge the past. So, let’s conduct a brief technical analysis of CCIV stock.
Pre-merger-announcement stocks tend to trade near $10, and Churchill Capital IV shares weren’t an exception to this rule. Thus, the share price basically went nowhere in 2020 – but that would change soon.
A confluence of events took place in early 2021. First, there was the hype over SPAC stocks. Second, electric vehicle investments were still hot, but starting to cool off somewhat.
Third, meme stock mania was taking hold of the markets. I can’t prove that CCIV stock was commandeered by the Reddit short squeeze mob, but this may have happened.
In any case, Churchill Capital IV shares went absolutely bananas in early 2021. Amazingly, in February they reached a high point of $64.86.
Then the crash started. Folks who invested at $10 still did well overall, though, as CCIV stock bottomed out slightly below $20.
Still, it’s understandable if long-term investors are disappointed. From April through mid-July, the stock mostly drifted sideways in the low-to- mid $20’s.
A Critical Update
As we’ve seen, an investment in Churchill Capital IV requires patience, and even some faith.
The bulls might not have to wait too much longer, though. After all, Lucid Motors has stated that it is preparing to commence production of the Lucid Air in the second half of 2021.
And so, here we are in 2021’s second half and it shouldn’t be long now.
As evidence of this, Lucid Motors provided a critical update which, I feel, has largely gone unnoticed by the investing community.
Or at least, it’s under-appreciated. In particular, Lucid Motors revealed that it has completed the pre-production builds and “has started the production of quality validation builds of the Lucid Air.”
Those are big steps forward, but there’s more. Reportedly, Lucid Motors passed 10,000 paid reservations for the Lucid Air.
That 10,000 count includes reservations for the Dream Edition, the Grand Touring edition as well as the Touring and Pure versions.
With all of those reservations, Lucid Motors will undoubtedly need to expand its manufacturing capacity.
And indeed, that’s what the company plans to do.
According to the press release, Lucid Motors plans to “accelerate approximately $350 million of planned capex investment from future periods into 2021-23.”
Plus, the company intends to “otherwise enhance manufacturing capabilities by expanding overall capex investments by up to 6-7% during 2021-2026.”
If all goes according to plan, Lucid Motors hopes to provide for 2.7 million square feet of additional manufacturing space by 2023.
And with that, the company would be able to increase its Lucid Air manufacturing capacity to up to roughly 53,000 vehicles per year.
The Bottom Line
Clearly, Lucid Motors is among the most ambitious electric vehicle manufacturers.
Sure, you’d be taking on some risk by holding CCIV stock. There’s no guarantee that the market for luxury electric cars will be as robust as expected.
If you’re bold enough to believe in Lucid Motors’ highly ambitious vision, though, the returns could be “accelerated” to the max.
The stock market can be unpredictable, volatile, and sometimes totally nonsensical. InvestorPlace.com
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
CCIV shares were trading at $21.11 per share on Monday morning, down $1.68 (-7.37%). Year-to-date, CCIV has gained 110.89%, versus a 13.87% rise in the benchmark S&P 500 index during the same period.
About the Author: David Moadel
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. More…
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