Why Churchill Capital IV Stock Dropped After Finally Confirming Its Merger With Lucid Motors
For several weeks, rumors swirled that Churchill Capital IV (NYSE:CCIV) was preparing to merge with Lucid Motors. Lucid, one of the hottest electric vehicle (EV) start-ups, is about to begin delivering its luxury sedan, the Lucid Air, within a few months. At long last, the companies confirmed the deal last night, announcing that Churchill Capital IV and Lucid Motors have entered into a definitive merger agreement. Shares promptly tanked in extended trading.
Just last week, I suggested that I wouldn’t be surprised if this ended up being a “buy the rumor, sell the news” situation. That adage refers to a common phenomenon in the market when an event fails to live up to expectations. Here’s why investors may be disappointed in the deal.
Image source: Lucid Motors.
How the deal is structured
Over the weekend, Bloomberg reported that a deal might be imminent, suggesting that the announcement could
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