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Shares of Lucid Motors (LCID) are falling after the EV maker announced this another capital increase through a share sale late Wednesday night, as the California-based EV maker looks for further runway ahead of the release of its upcoming EV SUV.
Lucid said it will offer up to 262,446,931 shares, likely to raise about $1.67 billion, for general corporate purposes, as well as for capital expenditures and working capital.
The company also said its majority shareholder, Ayar Third Investment Company, a subsidiary of the Public Investment Fund, would purchase an additional 374,717,927 shares through a private placement, allowing Ayar to retain its 58.8% stake without dilution.
Following these moves, Lucid stock fell 16% in midday trading.
The stock offering comes just two months after Ayar gave Lucid a cash injection of about $1.5 billion.
In addition, Lucid presented preliminary third quarter financial results, with an expected operating loss of $765 million to $790 million for the quarter, similar to the $790 million loss in the second quarter. Third-quarter revenue is expected to be between $199 million and $200 million, higher than estimates of $196.4 million compiled by Bloomberg.
Lucid also said it had approximately $1.9 billion in cash and equivalents, with total liquidity of $4 billion prior to the capital raise.
Last week Lucid said it delivered 2,781 cars during the quarter, better than Bloomberg estimates, but the 1,805 cars produced missed what the Street expected.
Lucid hopes its upcoming Gravity SUV, expected to begin production later this year, will boost sales by a significant margin.
“We believe the total addressable market for Gravity is six times larger than Lucid Air,” Lucid CEO Peter Rawlinson said in an interview with Yahoo Finance in August.
Rawlinson said the company will eventually have the capacity to build 90,000 Gravity SUVs per year at its Arizona factory.
The big question will be whether Lucid can build the Gravity SUV efficiently and undercut costs. The Gravity is expected to cost around $80,000 in the US, right at the threshold to qualify for the federal EV tax credit.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him Tweet and on Instagram.
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