Why is Lucid Stock Dropping? Lucid gets SEC subpoena on blank-check

Lucid Motors Shares plunge

Lucid Motors subpoenaed by the SEC. Shares plunge

Upstart electric vehicle maker Lucid Motors disclosed Monday it has received a subpoena from the SEC, sending its shares plunging 14% in premarket trading.

why is lucid down ?

The company said the probe “appears to concern” the SPAC deal that took it public earlier this year, along with “certain projections and statements.”

Lucid (LCID) raised $4 billion through its combination with Churchill Capital Corp., which was a shell company set up to take a company public without having to go through the typical initial public offering process. The deal was announced in February and shares started trading on Nasdaq in July.

Lucid, founded by headed by former Tesla engineer Peter Rawlinson, has been a relatively hot EV company, even though it just started its first deliver of electric vehicles at the end of October. Its Lucid Air Dream edition has been certified by the EPA as being able to go 520 miles on a single charge, the longest range of any pure battery EV yet, including any Tesla. And the Lucid Air was named the MotorTrend Car of the Year in October.

Shares of Lucid had nearly doubled since they started trading on the Nasdaq.

Lucid is the latest in a growing group of upstart EVs with big questions about financial projections.

Shares of Nikola, which plans to make electric and fuel-cell powered trucks, plunged in September of 2020 after Hindenburg Research, a short-seller, accused it of an “intricate fraud.” Hindenburg claimed Nikola’s products were much farther from reaching the market than they advertised. Its founder, Trevor Milton, was forced to resign and in February the company’s own internal investigation found he misled investors. Milton now faces federal criminal charges, as well as charges from the SEC that he deceived investors.

Another electric truck start-up, Lordstown Motors, was also hit by a report from Hindenburg, which raised questions about the orders for its trucks. Its CEO and CFO also were forced to resign.

what is SEC ? U.S. Securities and Exchange Commission

The U.S. Securities and Exchange Commission (SEC) is a large independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929.

The primary purpose of the SEC is to enforce the law against market manipulation.

In addition to the Securities Exchange Act of 1934, which created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes–Oxley Act of 2002, and other statutes. The SEC was created by Section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d and commonly referred to as the Exchange Act or the 1934 Act).

what is Lucid Motors ?

Lucid Group, Inc. (formerly known as Atieva) is an American electric vehicle manufacturer headquartered in Newark, California, United States. Lucid’s other divisions include energy storage, and original equipment manufacturing.

The company was founded in 2007. Deliveries of the Dream Edition launch versions of Lucid Air were made available to the first group of 20 reservation holders Saturday, Oct 30, 2021 who departed corporate headquarters as part of a Lucid rally.

Lucid Is Subpoenaed by SEC Related to SPAC Deal, Shares Fall

Electric-vehicle company says regulators are requesting certain documents in a probe that appears to concern projections and statements

Lucid Group Inc. said it received a subpoena from the Securities and Exchange Commission related to the deal that took the electric vehicle company public this summer.

EV maker Lucid gets SEC subpoena on $24-billion blank-check deal

The U.S. securities regulator has asked Lucid Group Inc for documents related to an investigation into its blank-check deal, joining a growing list of companies that have come under scrutiny for their merger with shell companies.

Shares of the luxury electric-car maker fell about 14% in pre-market trading on Monday after disclosing that it had received a subpoena from the U.S. Securities and Exchange Commission on Dec. 3.

“The investigation appears to concern the business combination between the Company (Churchill Capital Corp. IV) and Atieva Inc and certain projections and statements,” Lucid said in a regulatory filing.

Lucid’s deal with veteran dealmaker Michael Klein’s blank-check acquisition firm had given the combined company a pro-forma equity value of $24 billion and was completed earlier this year.

It was one of the biggest in a string of deals with Special Purpose Acquisition Companies (SPACs) that included electric vehicle makers such as Nikola Corp and Fisker Inc.

The California startup joins many other electric-car makers being investigated by federal agencies and regulators as they rush to meet production targets and catch up with Tesla Inc which is producing nearly 200,000 cars every quarter.

Nikola Corp is working with U.S. regulators to pay a $125 million penalty to settle a charge against its founder Trevor Milton for using social media to repeatedly mislead investors.

Lordstown Motors is being investigated for vehicle pre-orders and its merger with blank-check company DiamondPeak Holdings.

Founded in 2007 as Atieva Inc by former Tesla executive Bernard Tse and entrepreneur Sam Weng, Lucid is aiming to achieve production target of 20,000 vehicles in 2022 and 50,000 in 2023.

Lucid had in September secured $4.4 billion it needed until the end of next year.

It was funded initially by Chinese and Silicon Valley venture investors, with additional funding from backers like state-owned Chinese auto maker BAIC Motor and Chinese technology company LeEco.

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