Forbes magazine revealed in a recent report that Lucid Group’s share price has sharply declined after losing 82% of its value this year.
Saudi Arabia’s Public Investment Fund holds nearly 62% of Lucid’s common stock, the US magazine added.
According to the source, Lucid Group has raised an additional $1.5 billion to support ongoing operations, with $915 million being contributed by the Saudi Arabia Public Investment Fund.
For its part, WCCF TECH website revealed that the Saudi PIF has again come to the rescue of Lucid Group investors.
Lucid Group investors received a proverbial dose of sunshine for a change, which split apart the monotony of recurring new lows for the stock and revitalized the bullish spirits for the FY 2023, it reported.
Lucid Group announced that it is raising approximately $915 million by selling some of its shares to the Ayar Third Investment Company, an affiliate of the Saudi PIF.
Bear in mind that many analysts, including The Future Fund’s Gary Black, have continued to flag Lucid Group’s ongoing cash burn problem as a major headwind. After all, Lucid continues to burn cash at the rate of $4 billion per year.
Lucid Group is currently burning around $1 billion in cash every quarter. Consequently, the company’s cash position would have declined to an estimated $2.85 billion by the end of December 2022.
MBS’ ambitions and failures
The Wall Street Journal reported that electric vehicle maker Lucid Group declared that it has completed a planned $1.5 billion equity offering. The company first announced the offering in November, when it reported its third-quarter results.
The announcement came after it reported a net loss of $690 million for the third quarter, on $195.5 million in revenue
Shares were down over 13% in after-market trading, according to the US paper.
Along the same line, Bloomberg reported that Saudi-backed Lucid said it produced 1,405 vehicles in the first half of 2022 and attributed the lower full-year target to “extraordinary supply chain and logistics challenges.”
Lucid Group Inc. fell as much as 13% in late trading after the luxury electric-vehicle startup halved its 2022 production target to 6,000 to 7,000 cars, it reads.
According to the paper, Saudi Arabia’s sovereign wealth fund has poured more money into the luxury electric car maker, following an initial investment in 2018.
The PIF announced its first investment of $1 billion in Lucid in September 2018. At the time the sovereign wealth fund said this would “provide the necessary funding to commercially launch Lucid’s first electric vehicle, the Lucid Air, in 2020.”
Saudi Arabia’s sovereign wealth fund has recently made another major investment in a US electric vehicles maker, striking a $1bn deal to provide much-needed financing for Tesla-rival Lucid Motors.
The move comes just weeks after the Financial Times revealed the Saudi Public Investment Fund, the state vehicle being used by Crown Prince Mohammed bin Salman to overhaul his nation’s economy, had built a near 5 per cent stake in Elon Musk’s car group Tesla.
While Saudi Arabia is investing in a sector that is primed to erode oil’s dominance in transportation, the kingdom still sees growth in vehicles powered by traditional fuels led by fast-growing emerging economies in Asia and Africa.
Failed investments
The Financial Times also reported that SoftBank founder Masayoshi Son said his conglomerate was taking a “defensive” position and slowing down investments after its Vision Fund posted a historic investment loss of ¥3.5tn ($27bn) for the full year.
The Softbank Vision Fund was unveiled less than a year ago, backed by Saudi Arabia and Japan’s SoftBank (SFTBF).
Saudi social media users took to social media platforms to condemn MBS’s huge spending in making failed investments.
