According to data from the start of this month, Newark, California-based electric vehicle manufacturer Lucid Motors has rewarded investors betting against its shares with hefty gains through the course of this year. The company aims to target the luxurious high end market segment with its vehicles, and it is. one of the few electric vehicle startups in the United States which aim to take advantage of the growing interest in the market.
Data shared by research firm S3 Partners reveals that by the start of this month, short sellers, who borrow and then sell a company's shares on the market in order to hope to profit from their transactions through a share price decline, saw their gains extend to $302 million. These gains come as Lucid's share price took a downward trend over the past month, aided by the lockup period expiring for some of its shareholders last month, allowing them to sell their holdings.
Lucid Motors Short Sellers Double Their Gains In Less Than A Month After Share Price Dip
From the start of August to the end of last week, Lucid Motor's share price has dropped by $23.77 19.93 16%, with a recovery that started with the start of this month, blunting out some of the damage. The shares opened at $23.77 in August and closed at $19.33 on Friday, and when we look at the drop that took place on the first of this month, some of the gains made by the short sellers become clearer.
From the start of August to the end of trading on September 1st, Lucid Motors' shares lost roughly a quarter or 25% of their value, with the dip in September coming as the lockup period for some of the company's investors expired. Lucid, which went public by merging with a special purpose acquisition company (SPAC) Churchill Capital Corp IV, had sold some of its shares to institutional investors who were prohibited from selling them before the lockup period expired.
As soon as it did, the market panicked after similar events for other companies, which led to their institutional camps immediately offloading their holdings.
Price and short interest data for Lucid Motors (NASDAQ: LCID) for the period starting from late June and ending in early September. Image: S3 Partners, LLC
In the aftermath of all this volatility, data from S3 partners reveals that by September 3rd, Lucid's short sellers had extended their gains to $302 million, which came after the shares moved upward by 3% and caused them a loss of $29 million on that day.
The August share price drop caused these gains to accelerate quickly, with data from the month's third week revealing that on the 16th, the short sellers had profited by $135 million. These extended to $200 million within four days and then grew by $100 million over the course of the next two weeks.
At the same time, the number of shares that the short sellers sold on the market continued to fluctuate wildly. Roughly a million shorted shares were repurchased and sold during August's third week, with the total amount increasing by roughly two million during that period. Since then, they have remained at this level, but the impact of the 6% share price increase on them remains to be determined.
Moving quickly when compared to other electric vehicle manufacturers, Lucid has plans to deliver its Lucid Air vehicle to customers later this year. In late August, the Air received a big boost when automobile magazine MotorTrend described it as a "fantastic machine" and outlined that the vehicle's driving range could extend beyond 500 miles under the right driving conditions.
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September 13, 2021 at 04:14PM
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Lucid Motors Short Sellers Extend Gains To $302 Million By September Start - Wccftech
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