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Lucid stock rises amid rumor of potential Saudi buyout

Yahoo Finance Live anchors discuss the rise in stock for Lucid amid reports of a potential Saudi buyout.

Video transcript


BRIAN SOZZI: Welcome back. Ahead of the opening bell on Wall Street, let's hit a few hot tickers here. First up, Lucid on reports that Saudi Arabia's Public Investment Fund is working to-- on plans to buy out the rest of the electric vehicle maker. And this stock has been a colossal disappointment since the company went public, down about 56% over the past year.

And I think it comes at a time where-- as you were talking about earlier in the show, guys-- pricing under pressure for electric vehicle makers. And the promise for Lucid was that they could come out here and charge extremely high prices for its cars, and then ultimately, at some point, turn profitable. That thesis is really being put to the test.

BRAD SMITH: Well, they're going after a different type of buyer. I mean, this is on the ultra high-end luxury side of the EV market, play that Tesla had very early on. And what was that strategy? It was to say, at least for Tesla's entrance into the space, it was all about how do we make sure that these vehicles look and feel sexy, how do we make sure that the more affluent consumer out there sees it as something that's perhaps on a pedestal and bring the rest of the EV market with it?

And who do you have at the helm of Lucid to begin that journey? You had Peter Rawlinson, who is one of the chief engineers of those very luxury-- luxurious vehicles over at Tesla, bringing the same model over to Lucid. They had a record year, at least last year, and being able to produce 7.180 vehicles.

So it's really just how do they compound on some of that production that they were able to showcase in 2022 and here in 2023, even as some of those more affluent consumers may be looking across the vehicle lineup that they have? Do you need a Lucid or do you need something else that's going to be out there in the market, especially given the fact that Mercedes Benz and their vehicles in the EQ class, that's going to also be hitting some-- hitting some roads this year too.

JULIE HYMAN: Yeah, and aside from the fundamentals of the company, now the question is, are the backers of the company going to step in and do some sort of financial engineering or buy it? So the report that came out on Friday, which caused the stock to spike as much as 98% before it closed up just 43%, was that the Saudi Public Investment Fund might be interested in buying all of the company. Now, this was highly speculative.

The report sort of acknowledged that it was pretty speculative. It was in Betaville-- it was a Betaville report that, again, sort of said this is just kind of chatter at this point. So that also kind of helps explain why the stock this morning is now-- which was up a lot earlier is now up something like 1%. So is it going to happen? If that doesn't happen, will something else happens that sort of supports the stock? It's unclear.

BRIAN SOZZI: These cars, I've always thought the Lucid-- Lucids were just beautiful cars. But I can only imagine taking just to get this car serviced. One little thing wrong, wow, that is a-- that could be a real wallet buster. I mean, it's mostly screens in here. It's amazing.

BRAD SMITH: It's the future.

BRIAN SOZZI: Well, the future is going to be very expensive, Brad, very expensive.

JULIE HYMAN: Well, I mean, isn't that like a Tesla?

BRIAN SOZZI: I think this is a little more advanced than a Tesla, just the interior wise. Interior wise in Tesla, you're just getting a giant hulking screen. I think the Lucid's a little more advanced and pushed that forward.

BRAD SMITH: Well, wait till you see the inside of that Mercedes EQ. It's just a screen there--


BRAD SMITH: --a screen here, a screen in the back.

BRIAN SOZZI: One thing goes wrong.

BRAD SMITH: Yeah. Yeah, it's going to be tough.