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LCID Stock: Why Are Investors Watching Lucid Motors Closely Ahead of Jan. 19?

Shares of Lucid (NASDAQ:LCID) are up more than 10% in 2022 so far, beating the benchmark S&P 500’s decline of over 2% by a healthy margin. However,…

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This article was originally published by Investor Place

Shares of Lucid (NASDAQ:LCID) are up more than 10% in 2022 so far, beating the benchmark S&P 500’s decline of over 2% by a healthy margin. However, it should be noted that Jan. 19 marks a major catalyst for shareholders of LCID stock. And unfortunately, the catalyst isn’t exactly a positive event.

The Lucid Motors (LCID) logo is displayed in front of an ad for the Air sedan.Source: T. Schneider / Shutterstock.com

The event? On Jan. 19, the lockup expiration for existing shareholders of Lucid will expire. According to a filing submitted to the U.S. Securities and Exchange Commission (SEC), existing or legacy Lucid shareholders own 1.19 billion shares of LCID stock. This is significant because existing shareholders make up a majority of Lucid’s ownership; there are currently 1.6 billion shares of LCID stock outstanding. As a result, shareholders should anticipate Jan. 19 to be an extremely volatile day.

LCID Stock: Lockup Expiration on Jan. 19

The Saudi Public Investment Fund (PIF) is the largest legacy shareholder of Lucid stock. The Saudi PIF owns a 67.2% stake in LCID stock, so investors are wondering if the fund plans on selling its shares on or after Jan. 19. However, the PIF is a long-term shareholder, so the fund will most likely not sell a significant portion of its investment.

The last lockup expiration for Lucid occurred on Sept. 1, 2021. That day, private investment as a public equity (PIPE) investors were allowed to sell their shares. Accordingly, LCID stock fell by almost 11%. Even worse, Lucid fell by more than 20% the week prior to the September PIPE lockup expiration.

Jan. 12 marks one week before the upcoming expiration date. Since Jan. 12, shares of LCID stock have declined by more than 7%. However, the Jan. 19 expiration may present a potential dip-buying opportunity. One month after the September expiration, Lucid traded more than 35% higher from its lockup day closing price. Today, the stock trades more than 135% above the Sept. 1 lockup day closing price.

There’s something else investors should know, however. In an amended 13G filing received on Jan. 7, PIPE shareholder Magnetar Financial sold 16.8 million shares of Lucid, or 94% of its position. Magnetar is a hedge fund based in Illinois that manages over $25 billion in discretionary assets under management (AUM).

Magnetar was an early supporter of Lucid and invested $250 million into the electric vehicle (EV) company back in 2017. Furthermore, Magnetar once purchased an additional 10 million shares of LCID stock as a PIPE investor for $15 per share. After the recent sale, Magnetar now owns just over 1 million shares of LCID stock.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Tesla Tumbles Despite Across The Board Beat After Warning Supply-Chain Constraints Seen Through 2022

Tesla Tumbles Despite Across The Board Beat After Warning Supply-Chain Constraints Seen Through 2022

As we previewed earlier, in today’s TSLA…

Tesla Tumbles Despite Across The Board Beat After Warning Supply-Chain Constraints Seen Through 2022

As we previewed earlier, in today’s TSLA earnings call, investors are going to be watching for “details about when production will begin at new factories in Austin and Berlin” and “sales projections for 2022 after the company surprised with record deliveries in the fourth quarter”, as Bloomberg wrote. We reported that in Q4, Tesla gave up on $1.3 billion in German subsidies it had hoped for as part of the EV manufacturer’s new battery-cell plant in Brandenburg, close to Berlin. 

The company may also offer color and face questions on Elon Musk’s stock sales, which amounted to over $10 billion worth of Tesla stock heading into the end of 2021. Recall, the company just posted a record delivery quarter for Q4. For 2021, the automaker delivered “over 936,000” vehicles, per a company press release. Those numbers were up about 87% from the year prior. The report also reminded that Tesla has said “repeatedly it expects 50% annual increases in deliveries over a multi-year period”.

In addition to sales and deliveries, investors will likely be watching the company’s vehicle mix and how it affects ASP, which declined 6% YOY last quarter.  It looks as though the phasing out of the Model S and the Model X is heading toward completion. Of the deliveries in the fourth quarter, 296,850 of them were Model 3 or Model Y vehicles, while just 11,750 were Model S or Model X vehicles.

Estimates had called for 12,719 Model S and X deliveries and 263,422 Model 3 and Y deliveries.

Investors may also be looking for color on a slew of recalls that occurred toward the end of last year, with the automaker recalling what amounted to hundreds of thousands of vehicles, stemming from from opening and closing the trunk lid that may damage the rearview camera cable harness and increase the risk of a crash.

There is much more in the our full preview here.

So what that in mind, here is what Tesla just reported for Q4 moments ago:

  • Revenue $17.72B, beating Est. $16.64B
  • Adj EPS $2.54, beating Est. $2.36
  • Automotive Gross Margin +30.6%,  beating Est. +29.9% (it was 29.2% ex-regulatory credits)
  • Adjusted EBITDA $4.09BN, beating est. of $3.894BN
  • Free cash flow $2.78 billion, +49% y/y, beating estimate $1.67 billion
  • Customer deposits $925 million, +23% y/y, and beating estimates of $808.0 million
  • Cash and cash equivalents $17.58 billion, -9.3% y/y, above the estimate $17.49 billion
  • CapEx was $1.81 billion in Q4: quarterly capex first broke $1 billion in the third quarter of 2020, and it’s been trending higher ever since, as Musk launched construction of two new assembly plants in Austin and Berlin.

So far so good, even if the company’s regulatory credits rose in Q4 to $314 million, up from 279 million in Q3.

So why is the stock tumbling after hours?

It appears that the market is focusing on the same issues that have been here previously, but is only now paying attention: namely production bottlenecks and supply-chain challenges.

Here is the text that the market is focusing on:

“In Q4, we saw a continuation of global supply chain, transportation, labor and other manufacturing challenges, limiting our ability to run our factories at full capacity.”

As Tesla noted in its Q4 2021 investor update, the company “plans to grow its manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain.”

And here is the big red flag: “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022”

The company also touched on supply-chain issue in another place in the slidedeck, saying that “after a successful 2021, our focus shifts to the future. We aim to increase our production as quickly as we can, not only through ramping production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai.”

Tesla also echoed what many other auto companies have said about 2022: those who have the chips will win: “We believe competitiveness in the EV market will be determined by the ability to add capacity across the supply chain and ramp production.

And yet, Tesla’s warning is bizarre because just as it is warning about supply chain bottlenecks, it says that “Fremont factory achieved record production in 2021. We believe there is potential to extend overall capacity beyond 600,000 per year. We aim to maximize output from our Fremont factory while ramping new factories.”

Even more surprising, the company said that “over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.” Putting this in context, a 50% gain this year would be about 1.8 million vehicles. And even if Tesla does have issues, it’s outperformed the rest of the auto industry in its ability to adapt to shortages.

To be clear, a 50% gain this year would be about 1.8 million vehicles. And even if Tesla does have issues, it’s outperformed the rest of the auto industry in its ability to adapt to shortages.

Commenting on the results, Gene Munster of Loup Ventures said that “the current state of the business is doing exceptionally well,” said Munster. “But the commentary on the risk factors are taking on a different weight in the current environment. As a large cap company, you need to be pounding the table that everything is going well. Whenever there are unknowns about the future it can spook investors a little bit.”

So bottom line, great results but for a company that is trading on a ludicrous forward multiple, that is to be expected. Meanwhile, the market is spooked by continued supply-chain issues, and the stocks is down on the day, erasing an earlier loss of as much as 5% when TSLA stock hit a session low of $880 after trading at $987.69 earlier.

If these losses hold in regular trading tomorrow – and Tesla has a knack of staging miraculous recoveries during the Musk call – Tesla shares will go back to levels last touched in mid-December. The stock is currently down about 4%.

And if Powell’s mauling wasn’t enough, Tesla’s troubles are also weighing on shares of other electric vehicle startups as well, with several trading lower in postmarket trading such as Rivian down 2.3%, Lucid falling over 1% and Nikola down 1.6%.

The Tesla Q4 investor deck can be found here.

Tyler Durden
Wed, 01/26/2022 – 16:31

Author: Tyler Durden

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High Enthusiasm Could Prevail for Lucid Group Despite Market Volatility

With growth and meme stocks selling off in response to the Federal Reserve’s rate hike plans, you’d think a high-flier like Lucid Group (NASDAQ:LCID)…

With growth and meme stocks selling off in response to the Federal Reserve’s rate hike plans, you’d think a high-flier like Lucid Group (NASDAQ:LCID) would be making similar moves. But compared to other electric vehicle (EV) stocks and popular retail-trader plays, LCID stock has seen only a moderate pullback.

The Lucid Motors (LCID) Plant in Arizona.Source: Around the World Photos / Shutterstock.com

Year-to-date (YTD), it has basically treaded water. In contrast, another heavily-hyped early-stage EV play, Rivian (NASDAQ:RIVN), has taken a harder dive. It’s down more than 40% YTD.

Compared to its fellow meme plays, LCID stock’s pullback has been relatively small as well. Meme stock leaders like AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME) have each seen declines similar in size to that of Rivian’s plunge since the start of 2022.

Overall, the prospect of higher interest rates is compelling investors to cash out of more speculative stocks that are valued on hope, hype and potential more than fundamentals. Yet while Lucid belongs more in the “hope and hype” category, why isn’t this change in the market affecting it?

Considering how much progress it made last year, investors remain excited that Lucid will continue to meet and beat high expectations in 2022. As long as this sentiment holds, it may be enough to counter further market-wide declines.

If the stock market starts to stabilize after its drop driven by rate hikes, the popular EV play may have the ability to make a fast trip back to its past all-time high.

Why LCID Stock Is Holding Up Amid Volatility

Admittedly, I may be making it sound like changes in the market have had zero impact on Lucid shares. I’ll concede that the stock, at around $36.75 per share, is down a fair amount from where it was in November.

As you likely recall, the infrastructure bill helped reignite excitement for EV stocks. This revved up LCID stock back to prices above $50 per share. It didn’t return to its past high-water mark ($64.86 per share), but it came close. As the latest wave of the EV trend faded, it naturally moved lower, as was seen with names like Rivian.

However, since then it’s remained relatively steady. The stock has found a floor in the mid-to-high $30s per share. In contrast, RIVN stock has stayed in freefall. So, too, has another electric vehicle startup, Fisker (NYSE:FSR). Again, chalk it up to all the progress it made in recent months.

As Louis Navellier recently discussed, Lucid’s recent progress includes making its first deliveries in the United States. Also, it’s continuing to build up its backlog of reservations.

On top of this, its flagship Air luxury sedan model won Motor Trend’s “Car of the Year” award. In the eyes of the market, these achievements may set the stage for even more accomplishments throughout this year.

Retail Investors Remain Electrified for Lucid

With its fast move from the pre-revenue stage to the revenue stage, retail investors are still electrified by LCID stock. They’re highly confident that it will hit milestones quickly in 2022, like it did in 2021. Upcoming milestones include producing 20,000 vehicles and expanding into the European market.

So, does that mean the stock’s gearing up to surge back above $50 — or perhaps even $60 — per share? It depends. Excitement for the company’s prospects is helping to counter the market uncertainty putting pressure on growth stocks. Even so, it hasn’t outweighed it.

If the stock market stays volatile as Federal Reserve policy grows increasingly hawkish, further volatility could prevent Lucid shares from rising again.

On the other hand, if the market’s negative reaction to Fed policy has already peaked, a full-on rebound may be in store as the dust settles. Assuming it hits one or several of its next key milestones, LCID stock may be back on its way toward its all-time high.

Buy LCID Stock If You Believe the Enthusiasm

In the past month, my past thesis on Lucid (that rate hikes would sink it) hasn’t really played out. Instead, shares have held steady. Excitement for its future has been enough to prevent the fear, uncertainty and doubt in the markets from tanking its price.

That said, there’s no guarantee the current sentiment on Lucid will hold. Hiccups or setbacks could cause investors to change their take on it, sending LCID stock in reverse. But if you believe the company’s successes over the past few months mean it will continue to crush it without skipping a beat, buy it today.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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NIO Stock Alert: Why Did Nio Just Hit a New 52-Week Low?

One month into 2022, the electric vehicle (EV) race is off to a slow start. Industry leader Tesla (NASDAQ:TSLA) has spent the month battling turbulence,…

One month into 2022, the electric vehicle (EV) race is off to a slow start. Industry leader Tesla (NASDAQ:TSLA) has spent the month battling turbulence, but for some, the outlook is worse. Chinese EV producer Nio (NYSE:NIO) began last year on an extremely high note, with prices in January 2021 close to $60 per share. Today, NIO stock has shed almost two-thirds of its value. As of this writing, it is trading at just over $23. For a company that was hailed as a breakout stock for most of 2021, these types of declines raise some questions. Let’s take a look at how this company has fallen so far.

Source: Robert Way / Shutterstock.com

What’s Happening With NIO Stock

Today represents the lowest price that NIO stock has hit since October 2020, when share prices dipped to $21. Three months later, they would reach an all-time high of $62.84. As MarketWatch reports, this three-day losing streak has cost NIO more than 19% so far. On a worse note, the company’s American Depository Receipts (ADRs) have fallen 62% from the stock’s all-time high closing price.

The good news is that NIO stock has only fallen 0.25% so far today. That loss isn’t too severe on its own, but NIO has already fallen more than 19% for the week and almost 21% for the month. However, the past six months illustrate just how NIO stock has fallen. This former EV race contender has lost 45% since July 2021.

Why It Matters

Things have been fairly mixed for Chinese EV stocks today. Nio’s two primary peers are trading differently. XPeng (NYSE:XPEV) has fallen by 0.25% today in a pattern that closely mimics what we’ve seen from Nio. Li Auto (NASDAQ:LI), on the other hand, is up 0.16%. Meanwhile, in the U.S., Rivian (NASDAQ:RIVN) has also shaken its tough month and is back in the green today. It seems to be moving in solidarity with Tesla stock, which is riding high on the momentum generated by its pre-earnings call buzz.

“With the S&P 500 and Nasdaq 100 both down more than 3% today, Nio has not been able to escape the carnage,” InvestorPlace’s Eddie Pan reported yesterday. His assessment is certainly correct. Investor confidence in NIO stock has been low since the year began. Even the announcement of an expansion into European markets hasn’t helped bolster the stock. As Pan also reports, though, NIO stock price predictions remain generally bullish, with analysts maintaining fairly high price targets.

These analysts aren’t the only ones remaining optimistic. InvestorPlace’s Vandita Jadeja recently touted NIO’s declines as a buy-the-dip opportunity. Fellow contributor Ian Cooper took a similar position, citing positive delivery statistics and potential for earnings momentum as likely stock-boosting catalysts for the year ahead. To his way of thinking, NIO could easily reach $44.27 if this type of momentum takes hold.

Why It Matters

NIO stock’s recent performance is clearly a good news/bad news type of scenario. The recent numbers have been disappointing. But as Cooper reminds us, it’s important to focus on the road ahead. Nio will have plenty of chances to regain the momentum it lost in recent months. The primary question is, how long will it take?

In any event, the catalysts of which Cooper speaks shouldn’t be ignored. EV demand is still growing, and Nio is working to gain a foothold in a new international market. There’s plenty of reason to believe that NIO stock could once again take off in 2022.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Author: Samuel O'Brient

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