Saudi Arabia’s sovereign wealth fund has made a fortune on Lucid Motors – but missed another windfall by selling Tesla shares

Lucid Air ADAS_1
A Lucid Motors vehicle.

  • Saudi Arabia’s Lucid Motors stake is more valuable than the rest of its US shares combined.
  • The country’s public investment fund owns about $ 46 billion worth of Lucid shares today.
  • PIF sold a stake in Tesla, which would have been worth up to $ 50 billion earlier this month.

Saudi Arabia has made a fortune on Lucid Motors this year, but missed another winner by selling Tesla shares.

The country’s public investment fund (PIF) revealed a $ 26 billion stake in Lucid in its third-quarter portfolio update on Monday. PIF listed its holdings in its US equity portfolio for the first time since the launch of electric cars was listed in July.

The addition of Lucid was almost entirely responsible for the fact that PIF’s portfolio almost tripled in value to $ 43 billion in the third quarter. In addition, Lucid accounted for 59% of this figure at the end of September.

Lucid’s share price has risen more than 75% since then, raising the value of PIF’s stake to about $ 46 billion today – close to the full value of its portfolio at the end of the third quarter.

PIF invested $ 1.3 billion in Lucid about three years ago when the startup was short of money. It still owns 63% of the startup after its public debut, SEC archives show.

While PIF’s investment in Lucid has paid off nicely, it left a fortune on the table by selling the carmaker’s biggest rival. The sovereign wealth fund bought split-adjusted 41 million shares in Elon Musk’s Tesla in the fourth quarter of 2018, but divested the entire holding by the end of March last year – when the company’s valuation was around a tenth of its current level.

The fund’s Tesla stake would have been worth about $ 42 billion today, and more than $ 50 billion when the stock peaked earlier this month. In other words, it could have made several times its money if it had waited longer to sell.

PIF – which owns billions of shares in Uber, Activision Blizzard and Electronic Arts – aggressively expanded its portfolio last quarter. It invested in Alibaba, PayPal, Pinterest, Shopify, Walmart and other stocks, increasing its total holdings from 13 to 32.

Lucid was listed through a reverse merger with Churchill Capital IV, a Special Purpose Acquisition Company (SPAC). Churchill is led by Michael Klein, a former Citi banker who has advised Warren Buffett on several deals over the years.

The automaker generated just $ 700,000 in revenue and recorded a net loss of $ 1.5 billion in the nine months to September 30, third-quarter earnings showed this week. On the other hand, Lucid received more than 17,000 reservations, raised $ 1.3 billion in estimated reservations, and had $ 4.8 billion in cash available at the last count.

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