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So correct me if I am wrong in my understanding here but... CCIV has a NAV of $10. The SPAC trades at $55 now (though down after this news). This means that w

So correct me if I am wrong in my understanding here but... CCIV has a NAV of $10. The SPAC trades at $55 now (though down after this news). This means that whatever price Lucid just agreed to for their valuation, the SPAC holders effectively pay 5.5x that amount for the shares they are getting in Lucid. So that means that the SPAC investors just effectively invested in Lucid at a 132B valuation? Is that right?

eigenvalue 6y ago
No, the shares of CCIV were valued by Lucid at their approximate market price, not the NAV.
- zamfi 6y ago
  Why would this be the case? The money they're getting is coming from CCIV's assets (which don't change based on the market price) and the new PIPE.
mrorbitman 6y ago
No I don't think so. A ~$37 price tag for CCIV would translate to ~$60B Lucid valuation. I'll buy in if it gets close to that tomorrow (I expect it will) https://www.youtube.com/watch?v=NR76ObYeGkw https://www.youtube.com/watch?v=NR76ObYeGkw
- Negitivefrags 6y ago
  I think maybe I got the NAV wrong due to this PIPE thing that they are getting extra capital from. But with your math then the people buying at $55 bought in at a 90b valuation? That's still a lot higher than the 24B in this news headline.
Lazare 6y ago
It's absurdly complicated, but....as I understand it, yes. 1. CCIV sold shared at $10 each, raising a bit over $2b 2. Those shares were trading around $55. This price represents a "pre-pop"; the price spiked on rumours CCIV would be merging with Lucid. There's still only $2b of money in the pot though. 3. CCIV is agreeing to value Lucid at $24b. The $2b of cash will buy around 8% of the company. 4. A seperate (PIPE) investment is adding another $2b of cash to the pot, but what terms the PIPE investment is getting and what valuation they're using is unknown. 5. So yes, if you bought a share in CCIV for $55 (or held onto it rather than selling it for $55), and are opting not to redeem, you're saying that you think $10 worth of Lucid at a $24b value is going to be worth over $55 at their "true" valuation which would be....yeah, at least $132b. See also: https://www.bloomberg.com/opinion/articles/2021-02-19/michael-klein-s-cciv-hits-spac-jackpot-with-reddit-adored-lucid https://www.bloomberg.com/opinion/articles/2021-02-19/michae... That was written a few days ago before the deal had been made when there was speculation of a $12b valuation, and it already seemed a bit wild So...yes, either I'm missing something basic, or a $55 share value now is basically a gamble on Lucid having a market cap of well over $100b once it's trading. (Talk about first day pops; with SPACs you don't even have to wait until a deal has been signed to get a several hundred percent pop....)

eigenvalue 6y ago

No, the shares of CCIV were valued by Lucid at their approximate market price, not the NAV.

zamfi 6y ago
Why would this be the case? The money they're getting is coming from CCIV's assets (which don't change based on the market price) and the new PIPE.

mrorbitman 6y ago

No I don't think so. A ~$37 price tag for CCIV would translate to ~$60B Lucid valuation. I'll buy in if it gets close to that tomorrow (I expect it will) https://www.youtube.com/watch?v=NR76ObYeGkw https://www.youtube.com/watch?v=NR76ObYeGkw

Negitivefrags 6y ago
I think maybe I got the NAV wrong due to this PIPE thing that they are getting extra capital from. But with your math then the people buying at $55 bought in at a 90b valuation? That's still a lot higher than the 24B in this news headline.

Lazare 6y ago

It's absurdly complicated, but....as I understand it, yes. 1. CCIV sold shared at $10 each, raising a bit over $2b 2. Those shares were trading around $55. This price represents a "pre-pop"; the price spiked on rumours CCIV would be merging with Lucid. There's still only $2b of money in the pot though. 3. CCIV is agreeing to value Lucid at $24b. The $2b of cash will buy around 8% of the company. 4. A seperate (PIPE) investment is adding another $2b of cash to the pot, but what terms the PIPE investment is getting and what valuation they're using is unknown. 5. So yes, if you bought a share in CCIV for $55 (or held onto it rather than selling it for $55), and are opting not to redeem, you're saying that you think $10 worth of Lucid at a $24b value is going to be worth over $55 at their "true" valuation which would be....yeah, at least $132b. See also: https://www.bloomberg.com/opinion/articles/2021-02-19/michael-klein-s-cciv-hits-spac-jackpot-with-reddit-adored-lucid https://www.bloomberg.com/opinion/articles/2021-02-19/michae... That was written a few days ago before the deal had been made when there was speculation of a $12b valuation, and it already seemed a bit wild So...yes, either I'm missing something basic, or a $55 share value now is basically a gamble on Lucid having a market cap of well over $100b once it's trading. (Talk about first day pops; with SPACs you don't even have to wait until a deal has been signed to get a several hundred percent pop....)