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Lucid Stock Lower After $1.75B Convertible-Note Offering

Lucid earlier this week said it received an SEC subpoena regarding its SPAC merger with Churchill Capital.
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Shares of Lucid Group  (LCID) - Get Lucid Group, Inc. Report dropped on Thursday after the electric-vehicle producer proposed to offer $1.75 billion of convertible senior notes.

Lucid shares ended the day off $8.20, or 18%, at $36.52.

The notes, due 2026, are to be sold in a private offering to institutional buyers. 

Lucid also expects to grant the initial purchasers an option on an additional $262.5 million of notes. 

The Newark, Calif., company intends to use the proceeds from the offering to "finance or refinance, in whole or in part, one or more new or existing 'Eligible Green Investments.'"

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Those green investments include "the development, manufacture, or distribution of products, key components, and machinery related to electric vehicles or energy storage systems, as well as investments and expenditures related to renewable energy, energy efficiency, and sustainable water and waste management."

Why Lucid's CEO Thinks He Can Take On Tesla

Earlier this week, Lucid shares dropped after the luxury-electric-car maker said it received a subpoena from the U.S. Securities and Exchange Commission linked to a probe into its July merger with Churchill Capital.

Lucid went public in July following a merger with Churchill, a so-called a blank-check company started by investment banker Michael Klein. Lucid was founded as Atieva in 2007 by former Tesla  (TSLA) - Get Tesla Inc Report executive Bernard Tse.

SPACs, or blank-check companies, are formed for the express purpose of finding and merging with an operating partner. The idea is to speed the operating company to the public markets and avoid the extended process of a traditional initial public offering.

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