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Lucid Motors, a high-flying EV company that is targeting the luxury segment, was the subject of an intense speculation frenzy earlier this year amid persistent rumors regarding its merger with the SPAC Churchill Capital Corp. IV (NYSE:CCIV). Now, however, newly revealed information has upended the general understanding as to how these merger negotiations progressed.
To wit, Churchill Capital filed a Form S-4 with the US SEC yesterday. Daniel Johnson, however, picked up a crucial passage regarding Churchill’s merger negotiations with Lucid Motors:
A timeline of the $CCIV deal in the S-4 filed today, go to page 130 to read - https://t.co/mUy6V52sBw
Jan 11 - Bloomberg article ⬇️Jan 12 - NDAJan 14 - LOI for $9-11B EV from CCIVJan 21 - LOI increased to $11-12.5B by CCIVJan 22 - Lucid proposes $11.75BJan 23 - Executed LOI pic.twitter.com/9jMrfkgjox
— Daniel Johnson (@DJohnson_CPA) March 22, 2021
At the heart of the issue is the following passage, found on page 130 of the Form S-4:
The filing goes on to note:
Now, readers should note that investors experienced significant consternation between the 11th of January 2021, when Bloomberg published a report indicating merger negotiations between Lucid Motors and Churchill Capital, and the 22nd of February 2021, when a merger DA finally materialized. In the interim, Churchill Capital shares gyrated wildly as the investor sentiment soured on presumably protracted merger negotiations. However, the information released yesterday has completely flipped the general understanding of how these talks progressed; that the Bloomberg report acted as a catalyst for these talks and was not, in fact, evidence of ongoing merger negotiations. Now, readers should note that it took an average of 4.6 months in 2020 for a SPAC to finalize a merger DA after its IPO. While Churchill Capital shares were able to float publicly in July 2020, the SPAC had not entered into serious merger negotiations by January 2021. Consequently, the fact that Lucid Motors and Churchill Capital could finalize a very complex merger agreement – which involved a PIPE investment at a 150 percent premium for the first time ever – in just 43 days, or a little over 6 weeks, is a testament to the acumen and prowess of both parties involved. This development, in hindsight, serves to increase confidence in the ability of Lucid Motors and Churchill Capital to navigate the churn ahead in an increasingly competitive industry landscape.
