Lucid’s SPAC Investors Could Be Forced to Endure a Windfall
- EV startup can compel an early exercise of its warrants
- Investors get paper profit now but lose chance at later growth
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Small-time investors in Lucid Group Inc. are about to learn the hard way what it means to have too much of a good thing.
Lucid is an electric vehicle startup that debuted on the stock market last month by merging with a shell company that’s already listed. The shell, a so-called SPAC, raised money in a 2020 public offering and sweetened the deal by giving investors warrants. Those entitle holders to buy more shares for five years at a fixed price of $11.50, no matter how high the stock goes. With Lucid hovering around $21.70, investors could almost double their money.