Shares of the blank-check company at last check were tumbling 27% to $41.69. They've traded on Tuesday as low as $30, off 48%. That's a sharp contrast to the stock's soaring performance last month when news of the deal first started circulating.
The companies are combining at a transaction equity value of $11.75 billion. The deal is expected to close in the second quarter.
The transaction values Lucid at an initial pro-forma equity value of about $24 billion at the private investment in public entity offer price of $15 a share. The deal would provide Lucid with about $4.4 billion in cash.
The deal includes a private investment of $2.5 billion from Saudi Arabia’s Public Investment Fund, funds managed by the New York asset manager BlackRock (BLK) - Get Report and others, Reuters reported.
Lucid Chief Executive Peter Rawlinson said in a statement that the company was working to launch its electric luxury sedan, Lucid Air, this year, followed by the Gravity SUV in 2023.
Rawlinson said the company's Arizona facility is designed to produce about 365,000 units a year at scale.
Churchill Capital Corp. IV was started by investment banker Michael Klein.
The merger between Lucid and Churchill Capital is the latest in a string of deals by EV makers such as Nikola (NKLA) - Get Report and Fisker (FSR) - Get Report. They've gone public by combining with SPACs to raise cash and compete with Tesla (TSLA) - Get Report, the top electric-vehicle company.
TheStreet.com Founder Jim Cramer says "these deals are for real but overvalued."
"It might be worth $50 billion - $60 billion to the market. To me, that seems high," Cramer said. "But everyone wants to find the next Tesla. A lot of the SPACs that I'm looking at have to do with EV."