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The Saudi sovereign wealth fund, formally referred to as the Saudi PIF, stays sanguine on Lucid Group’s (NASDAQ: LCID) prospects, as illustrated by the fund’s most up-to-date Form 13-F filed with the SEC.
As per the newest submitting, the Saudi PIF has maintained its gigantic 62.7 % stake in Lucid Group, consisting of 1,015,252,523 shares. As of the top of June, the sovereign wealth fund’s stake in Lucid Group was valued at $17.42 billion.
While asserting its earnings for Q1 2022, Lucid Group had slashed its manufacturing goal for the yr from over 20,000 models to between 12,000 and 14,000 models. As a results of this downgrade, some buyers remained apprehensive that the Saudi sovereign wealth fund may select to money out of the inventory, entailing carnage in its wake. Nonetheless, these fears haven’t been realized thus far, though the dangers across the inventory stay elevated.
Consider the truth that Lucid Group additional slashed its yearly manufacturing goal to between 6,000 and seven,000 models whereas asserting its earnings for the second quarter of 2022. It additionally earned simply $97.3 million in income throughout Q2 in opposition to expectations of $157.12 million. Will the newest steerage downgrade immediate the Saudi PIF to desert its rosy outlook vis-à-vis Lucid Group? We’ll know as soon as the continued third quarter ends and the sovereign wealth fund once more information the requisite Form 13-F.
At this stage, the Saudi PIF has to weigh the expansion outlook of Lucid Group in opposition to its ongoing manufacturing woes and the attendant difficulty in ramping up manufacturing cadence. On the sunny facet, the Saudi state has been pretty supportive of Lucid Group, lately awarding round $3 billion in incentives to the EV producer for establishing a 155,000-units-per-year manufacturing facility within the Kingdom. The Saudis have additionally signed an settlement to buy as much as 100,000 electrical autos from the corporate over the following 10 years.
As we had famous in a earlier publish, Lucid Group at present constitutes a status challenge for the Kingdom. Consequently, the probabilities that the Saudi PIF would merely abandon the corporate attributable to ongoing manufacturing woes stay distant however materials. After all, Tesla was in a position to emerge from an identical stagnation following years of toil. Meanwhile, the Saudis, additional enriched by the continued commodity supercycle, can definitely afford to stay within the wait-and-see mode for the foreseeable future.