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Lucid shares soared while Fisker stock was plunging Monday.
FABRICE COFFRINI/AFP via Getty Images
Shares of two electric-vehicle start-ups were going in opposite directions Monday for the same reason—capital.
Lucid shares were up almost 18% at $3.26, while the S&P 500 and Nasdaq Composite were down about 0.3% and 0.5, respectively, after the company announced a $1 billion capital injection from majority shareholders in Saudi Arabia. Ayar Third Investment Co., which is affiliated with the Saudi Public Investment Fund, will purchase $1 billion in new convertible preferred shares.
Rising after a convertible sale—which can increase shares outstanding—shows how focused investors are on capital these days. Building a profitable EV start-up has taken longer and more money than anyone expected.
When Lucid was raising money via a merger with a special purpose acquisition company, it expected to ship 90,000 units in 2024. Wall Street projects 9,000.
It’s been hard for Fisker too. When it was raising money via a SPAC merger, the company projected 225,000 units produced in 2025. Wall Street expects 20,000.
Fisker stock was down 28% to 9 cents a share. The company announced Monday that it was no longer in negotiations with a large auto maker. Negotiations would likely have included a capital injection for a stake in the company.
Building car companies is expensive. Fisker and Lucid investors are finding that out the hard way.
Through early trading Monday, Fisker stock has dropped 98% over the past 12 months. Lucid shares have declined 61%.
Write to Al Root at allen.root@dowjones.com
