• Thu. Jun 20th, 2024

Lucid qualified prospects tech stocks’ 2023 rally thanks to Saudi takeover rumors


Feb 8, 2023
Lucid leads tech stocks' 2023 rally thanks to Saudi takeover rumors


Lucid Motors’ share cost has rallied 69% this 12 months.
Lucid Motors Reuters Rachel Mendelson/Insider
  • Shares in electrical-car maker Lucid Motors have jumped 69% in 2023.
  • It is even outperforming rival Tesla, which is up a still-stellar 60% 12 months-to-date.
  • Speculation of a takeover by Saudi Arabia’s sovereign prosperity fund has fueled Lucid’s recent rally.

Electrical-car maker Lucid Team has started off 2023 with a breakneck rally that is manufactured it the greatest-undertaking stock on the total Nasdaq Composite.

Its shares have climbed 69% calendar year-to-date, investing at $11.57 as of Tuesday’s closing bell. That makes Lucid the best performer on the tech-significant index, which by itself has jumped 15.7% because January 1.

Lucid is even beating rival EV maker Tesla, which is up just beneath 60% so considerably this yr at $196.81, regardless of analysts’ fears.

Tech shares have started off 2023 with a bang, thanks to investors’ growing expectation that the Federal Reserve will have to abandon hikes and start off slicing curiosity charges later this year to aid the US financial state. Equities are likely to rally when desire costs slide, for the reason that a reduce cost of borrowing boosts the potential dollars flows that make up section of companies’ valuations.

Lucid shares have also risen thanks to rumors of a looming takeover by Saudi Arabia’s Community Expenditure Fund, which invests on behalf of the governing administration and previously owns above 60% of the carmaker.

The stock jumped 43% on January 27 by itself, after the deals web site Betaville reported the Saudi PIF could be close to finalizing a full takeover.

Lucid’s share cost has fluctuated wildly because it joined the Nasdaq via merging with the Churchill Money IV SPAC in February 2021. It achieved an all-time superior of $58.05 soon right after that offer was introduced, but it has tended to hover at all over the $10 stage it initially outlined for.

Analysts are skeptical that stock in the business — which created just 7,100 vehicles last calendar year, in comparison with Tesla’s 1.3 million — will be equipped to sustain its existing rally.

Longtime bear Adam Jonas believes it will crash 57% from its latest stage, and he retains a price focus on of just $5 for the EV producer.

“We feel the basic outlook experiencing Lucid Team is additional probably deteriorating than enhancing,” he stated in a exploration observe last month.

Read through much more: Tesla’s cratering share rate goes outside of Musk’s preoccupation with Twitter. The entire EV industry is slowing down.

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