Lucid Group’s (NASDAQ:LCID) CEO maintains investors misinterpreted a public offering on Wednesday that raised roughly $1.75 billion — and led to the stock’s worst daily performance in nearly three years.
Peter Rawlinson said the raise, which included a public offering of nearly 262.5 million shares of its common stock, was a timely, strategic business decision to ensure the electric vehicle company has enough capital for its ongoing operations and growth plans. It also should alleviate any potential worries that the company would need to issue a “going concern” disclosure regarding its operations, he said.
“We’d signaled that we had a cash runway to Q4 next year. As a NASDAQ company, we have to avoid a going concern. And a going concern is issued within 12 months of your financial runway,” Rawlinson said Monday from the company’s newly opened offices in suburban Detroit. “So, it should have been no surprise to anybody.”
But Wall Street analysts largely took a negative view of the move due to its timing. Several said the raise was unnecessary or came earlier than expected for the company, which had $5.16 billion of total liquidity to end the third quarter. That included more than $4 billion in cash, cash equivalents and investment balances.
LCID shares opened Tuesday up five cents, or 2.4%, to $2.60.
