Technology

Investor no-show puts $24bn Lucid Motors Spac deal in jeopardy

The $ 24 billion deal for Lucid Motors to open Thursday after a blank check company merging with an electric vehicle start-up failed to put together enough support from individual investors at a key shareholders’ meeting. I had a hard time crossing the finish line.

Churchill Capital IV, a special-purpose acquisition company led by Wall Street deal maker Michael Klein, voted Thursday to put a rubber stamp on the merger with a California-based luxury electric car maker. ..

However, a proposal to establish Lucido as a public company did not get enough support from investors and the deal was not closed. It’s not necessarily because they oppose the deal, but rather because the majority of investors didn’t vote at all.

97% of the investors who voted Boosting planned mergers Overview of electronic car startups by Spac.

“The company still needs additional voting to get approval of the proposal by a majority of the outstanding shares,” Churchill said. “As a result, the meeting was postponed to get the required votes.”

On a phone call with shareholders, Klein and Lucido CEO Peter Rawlinson begged investors to vote for their shares. “The deal cannot be completed until Proposal 2 receives these votes,” Klein said.

For the past few days, advisors working with Churchill Capital IV and Lucido have reached out to Spac’s shareholders by britting online forums such as Reddit and StockTwits to “cancel votes.”

On a phone call with investors, Klein explained to some investors how to check the spam filter when an email detailing the voting process is sent to that folder.

Delayed closing of transaction Emphasize the pitfalls of Spacs Attracts a large number of individual investors. Such investors have flooded the stock market over the past year through online securities platforms such as Robin Hood.

“Every investor’s vote is important, whether it’s a Robin Hood trader or managing a portfolio through a traditional brokerage firm. Please vote,” Laurinson said on a phone call Thursday.

Robin Hood is currently pitching to investors about an initial public offering that could value the company for $ 35 billion, but faces criticism that it hasn’t provided enough guidance to novice traders.

One person involved in Lucid’s transaction said: Not suitable for users. “

Robin Hood usually doesn’t issue in-app notices about proxy solicitations, but those familiar with the procedure said they emailed all the necessary proxy solicitations.

Churchill Capital IV became one of the most popular stocks among amateur investors earlier this year as it raised its share price by almost 500% before rumors about trading with Lucid were announced.

Spac shares fell 2.2% to $ 22.91 on Thursday. If the trade collapses, stocks could fall towards a listing price of $ 10 per share.

The largest beneficiary of the planned transaction is Saudi Arabia’s Public Investment Fund, which owns a majority stake in Lucid after its automaker rescued it in 2018 when it faced financial difficulties.

Investor no-show puts $24bn Lucid Motors Spac deal in jeopardy Source link Investor no-show puts $24bn Lucid Motors Spac deal in jeopardy


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