The electric vehicle sector has experienced a surge of activity in 2024, driven by a heightened rivalry between industry leader Tesla (NASDAQ: TSLA) and its increasingly formidable Chinese competitors, most notably BYD (SHE: 002594).
That said, the market is not solely dominated by the major players; recent years have seen a proliferation of smaller manufacturers entering the scene, each vying to establish a unique niche or secure a stable foothold.
One of these manufacturers is Lucid Group (NASDAQ: LCID), which has opted to concentrate on the luxury electric vehicle segment. Despite the company’s latest announcements regarding vehicle deliveries and production numbers on October 7 highlighting significant growth, LCID shares have experienced a decline since that time.
At the time of writing, Lucid stock was priced at $2.26, reflecting a 34.06% decrease over the past month, which has contributed to a year-to-date (YTD) loss of 45.42%.
Nonetheless, a substantial insider acquisition has recently taken place, suggesting that major stakeholders still harbor confidence in the long-term potential of the high-end automaker.
Saudi Public Investment Fund acquires $1 billion in LCID shares
Ayar Third investment company, a division of the Saudi Sovereign fund, made a notable investment of approximately $1 billion to acquire a significant amount of LCID shares, according to a recent SEC Form 4 filing.
The transactions occurred on two occasions — on October 30, 374,717,927 shares of LCID stock were purchased at a price of $2.591 each. The following day, on October 31, another 21,470,459 shares were acquired at the same price.
The first transaction was valued at $970,894,148, while the second amounted to $55,629,959 — bringing the total investment to $1,026,524,107. Consequently, the Saudi fund’s ownership in the company has risen to 64.31%.
Can LCID stock rebound from its current decline?
Although this investment signals strong confidence from the Saudi sovereign fund, the market’s reaction has not been particularly positive.
Lucid is grappling with multiple challenges — it has had to reduce the prices of its flagship Air luxury model several times to boost sales, CEO Peter Rawlinson has previously warned against depending too heavily on the Saudi fund, and concerns regarding potential share dilution are on the rise.
There are a few encouraging indicators, though — the anticipated launch of the company’s Gravity SUV could act as a bullish catalyst. For investors who are willing to take on higher risk and have a long-term outlook, seizing the opportunity to purchase Lucid stock during its dip might be advantageous in the future, albeit Wall Street remains generally skeptical.
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