Saudi Prince Alwaleed bin Talal has acquired a $129.5 million stake in Lucid Group, providing a vote of confidence in the electric vehicle manufacturer weeks after it moved to quell speculation over its financial future.
Prince Alwaleed purchased 19.5 million shares, representing a 5 per cent stake in the company, according to a regulatory filing released on Tuesday. A representative for the prince said the shares were acquired during a recent decline in Lucid's stock price.
Lucid shares jumped 22 per cent in New York trading after the investment was disclosed, reaching their highest level since April.
The investment comes after a volatile period for the loss-making car maker. This month, Lucid denied reports suggesting it was preparing to file for bankruptcy, although it confirmed it had engaged restructuring advisers from AlixPartners. The announcement prompted a sharp sell-off in which the company's shares fell by as much as 57 per cent in a single session before recovering. The stock has since rebounded by more than 50 per cent from its record low on July 14.
"The investment is a meaningful vote of confidence and supports the view that Saudi investors continue to see value in the company," Bloomberg Intelligence contributing analyst Eric Varghese said. But the investment does not materially alter Lucid's long-term outlook given its cash burn and future funding requirements, he added.
Lucid chief executive Silvio Napoli has been introducing cost-cutting measures, including reducing the company's workforce, as the California-based manufacturer prepares to launch its mid-size vehicle platform, widely viewed as critical to achieving profitability.
Despite the recent recovery, Lucid's shares remain down by 72 per cent over the past 12 months, affecting its largest shareholder, Saudi Arabia's Public Investment Fund (PIF). The sovereign wealth fund owns 45.4 per cent of the company and has invested more than $9 billion.
Prince Alwaleed, one of the Middle East's most prominent investors, sold a minority stake in Kingdom Holding to PIF for $1.5 billion in 2022. A Lucid representative said the company does not comment on individual investments but welcomed what it described as an independent vote of confidence.
Prince Alwaleed, 71, has investments across the Gulf and elsewhere in the world, including holdings in Citigroup and Snap through both his personal portfolio and Kingdom Holding. According to the Bloomberg Billionaires Index, he has an estimated net worth of $24.2 billion.
The Lucid shares are held directly by Prince Alwaleed. His representative said they were acquired during the recent downturn when the company's market capitalisation fell below $2 billion. Lucid's valuation closed above $3 billion on Tuesday.
The investment also reflects broader efforts by Saudi Arabia to encourage collaboration between the country's leading investors and the PIF in support of Crown Prince Mohammed bin Salman's Vision 2030 economic diversification strategy. Prince Alwaleed is also a co-investor, alongside PIF, in SpaceX, whose shares have declined since a record-setting market debut in June.
