Lucid (NASDAQ: LCID) secures a $1.5 billion investment from Public Investment Fund affiliate Ayar Third Investment Company, boosting its liquidity and extending its cash runway. Cantor Fitzgerald upgrades LCID stock to “neutral” from “underweight” following this development.
The investment includes $750 million in convertible preferred stock and a $750 million unsecured delayed draw term loan facility. With this funding, Lucid expects to have sufficient liquidity until at least the fourth quarter of 2025. Ayar is already Lucid’s largest shareholder.
Cantor Fitzgerald Upgrades LCID Stock to “Neutral” From “Underweight”
Cantor Fitzgerald praises the Ayar investment for extending Lucid’s cash runway by two quarters. Lucid ended the second quarter with $4.28 billion in total liquidity, indicating strong financial health.
The investment demonstrates Ayar’s ongoing support for the company, with Cantor’s price target suggesting a potential upside of nearly 30% from current levels. The average Wall Street analyst price target for LCID is $3.06, with a low of $1.75 and a high of $4.
While the investment is positive, questions arise about the extent of support Lucid may receive from the sovereign wealth fund in the future. Lucid’s CEO has previously expressed caution about over-reliance on PIF and Ayar for funding.
During the second quarter, Lucid produced 2,110 vehicles and delivered 2,394, with plans to launch the Gravity SUV in the fourth quarter. The company remains focused on achieving its 2024 production targets.
Overall, the $1.5 billion investment from Ayar Third Investment Company strengthens Lucid’s financial position and provides a runway for growth and expansion in the electric vehicle market.