Cash-strapped electric vehicle maker Lucid Motors announced on Thursday a public offering of over 262 million shares, which is expected to generate approximately $1.67 billion in proceeds. The announcement, coupled with a warning of a larger-than-anticipated loss for the third quarter, triggered a decline of more than 17% in the company’s shares during premarket trading.
Lucid anticipates reporting an operational loss between $765 million and $790 million for the quarter ending September 30, surpassing analysts’ expectations of $751.7 million, as per data compiled by LSEG.
In addition to the public offering, Lucid has signed an agreement with Ayar Third Investment, an affiliate of Saudi Arabia’s Public Investment Fund and its largest shareholder, to sell nearly 375 million shares in a private placement. Despite this transaction, Ayar is expected to retain around 59% of Lucid’s outstanding shares.
The sovereign wealth fund’s affiliate previously committed an additional $1.5 billion in August, which Lucid had projected would provide enough liquidity through the fourth quarter of next year.
As of the end of the second quarter, Lucid reported having approximately $1.35 billion in cash and cash equivalents. The company plans to utilize the proceeds from both the stock sale and the private placement for general corporate purposes, capital expenditures, and working capital.
