Lucid secures $1.1B through convertible notes offering

NEWARK, Calif. - Lucid Group, Inc. (NASDAQ:LCID), a company specializing in advanced electric vehicles, has finalized a $1.1 billion convertible senior notes offering due in 2030. This financial move includes the full exercise of an option granted to initial purchasers, allowing them to acquire an additional $100 million principal amount of the notes. According to InvestingPro data, Lucid maintains a strong liquidity position with a current ratio of 4.18, indicating the company holds more cash than debt on its balance sheet.

The company's Chief Financial Officer, Taoufiq Boussaid, expressed satisfaction with the completion of the offering, highlighting its role in bolstering Lucid's growth trajectory and its partnership with the Public Investment Fund (PIF). The PIF's ongoing support is seen as a strategic advantage for Lucid in the pursuit of a sustainable future. This funding comes at a crucial time, as InvestingPro analysis shows the company generated revenue of $807.83M in the last twelve months while facing significant cash burn with negative free cash flow of $2.9B.

In conjunction with the offering, Lucid has implemented capped call transactions to elevate the effective conversion price of the notes to $4.80 per share, which is double the last reported sale price of Lucid's Class A common stock on the Nasdaq Global Select Market as of April 2, 2025. These transactions are intended to reduce potential dilution or cash obligations upon conversion of the notes.

Lucid has disclosed that after accounting for initial purchasers' discounts, commissions, and estimated offering expenses, the net proceeds from the offering amount to approximately $1,082.2 million. A portion of these proceeds, totaling around $118.3 million, was used to pay for the capped call transactions. Additionally, approximately $935.6 million was directed towards repurchasing roughly $1,052.5 million aggregate principal amount of its 1.25% convertible senior notes due in 2026. The remainder is earmarked for general corporate purposes.

The company also retains the flexibility to settle any conversions in cash, shares of its Class A common stock, or a combination of both, providing further control over potential dilution or cash obligations from future conversions of the notes.

This strategic financial maneuver is based on a press release statement and aims to position Lucid for sustained growth in the electric vehicle sector. For deeper insights into Lucid's financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis, including 12 key ProTips and detailed financial metrics in the Pro Research Report, helping investors make more informed decisions about this evolving EV player.

In other recent news, Lucid Group Inc. reported first-quarter vehicle deliveries of 3,109 units, aligning with market expectations but slightly below Benchmark's projection of 3,212 vehicles. The company provided revenue guidance ranging from $232,000 to $236,000, falling short of the consensus estimate of $246,000. Benchmark analysts maintained their Buy rating with a $5.00 price target, highlighting Lucid's domestic manufacturing as a buffer against tariffs. Cantor Fitzgerald also reaffirmed its Overweight rating with a $3.00 target, noting Lucid's delivery performance as a positive sign. Meanwhile, the company is expanding its production capabilities with a new facility in the Middle East to meet regional demand. Despite production figures below expectations, Lucid's strategic approach and luxury EV focus continue to attract analyst attention. Analysts from both Benchmark and Cantor Fitzgerald suggest that the company's domestic production will mitigate the impact of new tariffs. Overall, Lucid's ability to meet delivery expectations has been noted positively, even as it navigates broader market challenges.

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