Tesla rival files a ‘shelf offering’ with the SEC

Lucid Group Inc (NASDAQ: LCID) is down 8.0% on Tuesday after the electric vehicles manufacturer revealed to have filed a “shelf offering” with the U.S. Securities and Exchange Commission.

How much could Lucid raise in new capital?

The registration would help it raise up to $8.0 billion in new capital over the next three years without having to file a separate prospectus for each offering.

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Lucid, however, confirmed that it does not plan on selling new stock at the moment. The press release reads:

A shelf registration on Form S-3 will provide greater flexibility to raise capital in the future. These capital raises could include, common and preferred stock (including depositary shares), warrants, debt securities, purchase contracts and/or units.

Versus its year-to-date high, the Lucid stock is now down roughly 65%. Peer Nikola Corporation also filed to issue new stock on Tuesday.

Why is the Lucid stock down today?

The announcement wasn’t very well-received since whenever the Nasdaq-listed firm choose to sell new securities; it would dilute the shares outstanding.

Earlier this month, Lucid lowered its guidance for deliveries to only 7,000 at the top end of its range in 2022. Its previous guidance was up to 14,000. At the end of Q2, the automaker had $4.60 billion in cash – enough to support operations and expenses for about six quarters.  

The price action this morning may just be an opportunity to buy Lucid stock considering Wall Street has a consensus “overweight” rating on it with upside to $26 on average; about a 75% increase from here.