Lucid's $1B Capital Raise Plan Rattles Stock, But Retail Bulls Dismiss The Panic

Lucid Group Inc. shares extended losses in after-hours trading on Wednesday after the EV maker said it would raise some capital through a bond sale, although it failed to dent retail investor confidence. 

The company priced a $1 billion offering of 5.00% convertible senior notes due 2030 in a private sale to institutional buyers. 

It also granted an option for an additional $100 million in notes, set to mature on April 1, 2030. 

This option will translate to a conversion price of $3.00 per share, a 25% premium to Lucid's last closing price.

Lucid expects net proceeds of $983.6 million (or $1.08 billion if the full option is exercised). 

It plans to use about $935.6 million to repurchase $1.05 billion of its 1.25% convertible notes due 2026 and $107.5 million for capped call transactions, designed to offset potential dilution from conversions.

Additionally, Ayar Third Investment Company, a Saudi Arabia's Public Investment Fund (PIF) subsidiary, has agreed to purchase $430 million worth of Lucid shares through a prepaid forward transaction.

The announcement came amid a broader market slide caused by President Donald Trump's reciprocal tariffs on a list of countries.

On Stocktwits, sentiment for Lucid stayed 'bullish' amid a 13% jump in message volume.

Some traders pointed out that conversion before 2028 is only possible if Lucid's stock price exceeds $5.52 (130% of the conversion price), calling this a bullish setup. 

Others noted that the offering does not immediately dilute outstanding shares and expect the stock to revisit the $4–$5 range by summer, citing potential tailwinds from tariffs and increased interest from Tesla owners.

Investor sentiment was also boosted by Lucid reporting a 58% jump in first-quarter deliveries to 3,109 cars, taking its year-to-date tally to over 5,300.

Meanwhile, an EV report about Lucid's long-awaited Gravity SUV facing continued delivery delays due to safety issues plaguing production caused some worry.

Interim CEO Marc Winterhoff now expects U.S. deliveries to begin by the end of April, but the report quoted a source saying third-row safety testing remains incomplete.

Lucid plans to more than double its deliveries in 2025. The company's stock is down over 20% this year.

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