Surprisingly, Lucid Motors (Nasdaq:LCD) The inventory did not change a lot in the present day regardless of the information from the corporate He obtained a license To supply its electrical automobiles ( ) in a “particular financial zone” inside the Kingdom of Saudi Arabia. Shares initially rose on the information however have remained on a downward trajectory in current months, which seems to be weighing on the inventory once more in the present day.
The corporate’s allow will permit the manufacturing of Lucid automobiles in King Abdullah Financial Metropolis close to the Pink Sea. This metropolis is of strategic significance, as it’s near main waterways and “offers a powerful location for establishing a worldwide provide chain community” however can be handy from a tax perspective. Due to this fact, for traders, this seems to be like an excellent deal for a corporation seeking to promote its luxurious model globally.
It is also essential to keep in mind that Lucid beforehand obtained one other $1.8 billion from Saudi Arabia Public Funding Fund (Public Funding Fund) in June. This makes the Saudi authorities the bulk proprietor of Lucid, for higher or worse.
Let’s dive into what to do with this information in the present day — and why the market appears to be ignoring it.
LCID inventory was little moved after one other Saudi announcement
One concept that has been sticking round in my thoughts these days is that maybe US traders do not wish to personal LCID inventory primarily based on who owns them. Some massive institutional traders might not be capable of put money into the corporate whereas others might refuse to purchase shares on account of Saudi Arabia’s human rights file. Moreover, others may even see Lucid as having missed quite a bit within the luxurious EV area.
Regardless of the state of affairs, I feel LCID inventory ought to rise far more on this information than it at the moment does. Nevertheless, the corporate has actually had its fair proportion of difficulties. By way of manufacturing, pre-orders and future demand, Lucid’s future is unsure – and on this market, traders do not actually like uncertainty. This can be one other mitigating issue at play in the present day.
I feel Lucid might want to ramp up manufacturing in a significant method to see the sort of inventory worth rise that many traders have been hoping for. There’s quite a bit to love concerning the firm’s model and market place. Nevertheless, in the meanwhile, it is usually true that this inventory is troublesome for a lot of traders to personal.
On the date of publication, Chris McDonald didn’t maintain (both straight or not directly) any positions within the securities talked about on this article. The opinions expressed on this article are the writer’s personal and topic to InvestorPlace.com’s publishing tips.