Lucid, the electric car manufacturer, is set to raise up to $3 billion through a new stock offering to increase its cash reserves and production. The company will issue 173 million shares of new common stock on the Nasdaq, equivalent to approximately $1.2 billion. Additionally, Lucid has entered into an agreement with Saudi Arabia’s Public Investment Fund for it to purchase an additional 265 million shares of common stock in a private placement worth $1.8 billion. The private placement is expected to close on June 26, 2023, and will see the Public Investment Fund maintain its approximate 60.5% majority ownership of Lucid’s outstanding common stock.

Lucid says it will use the net proceeds from the public and private offerings “for general corporate purposes, which may include, among other things, capital expenditures and working capital.” The company’s chief financial officer says the firm has about $4.1 billion in liquidity which is enough to fund it until at least the second quarter of next year.

However, Lucid is behind its production targets in the United States, and competitors are cutting prices and offering discounts. While the company is building a new production facility in Saudi Arabia and has agreed to build up to 100,000 vehicles for the Saudi government over the next decade, its burn rate needs to fall fast.

Louis Navellier, chief investment officer at money management firm Navellier, told Reuters that “the secondary offering will probably be okay as there’s a lot of ESG dollars looking for investments. That, along with money from the Saudis, will ensure Lucid survives a couple of more years.”

Saudi Arabia’s current stake in Lucid is worth nearly $9 billion, but the brand’s cash and cash equivalents had fallen to $900 million at the end of the first quarter, down from the $1.74 billion in the previous quarter.

To enhance SEO, the following secondary headers (H2) can be incorporated:

H2: Lucid to Raise $3 Billion Through Stock Offering

H2: Two Ways Lucid Will Raise Money

H2: Lucid’s Private Placement with Saudi Arabia’s Public Investment Fund

H2: Lucid’s Use of Proceeds from Public and Private Offerings

H2: Lucid’s Liquidity and Production Targets

H2: Louis Navellier’s Comments on Lucid’s Secondary Offering

H2: Saudi Arabia’s Stake in Lucid and the Company’s Cash Reserves