Lucid Motors has corrected an error in its disclosure on a planned one-for-ten reverse stock split, revising its SEC proxy materials to show that the total number of authorised shares will also be cut in proportion to the split.
In an amendment filed with the US Securities and Exchange Commission (SEC) on Friday, the Newark-based electric vehicle maker changed its July 28 definitive proxy statement for the August 18 special shareholder meeting.
The original document had stated that the “total number of authorized shares of common stock, however, would remain unchanged at its current total of 15,000,000,000” after the reverse split.
The new filing removes that language and specifies that “the total number of authorised shares of common stock would be reduced in accordance with the Exchange Ratio” if the split is approved and implemented.
The revised charter amendment in Appendix A now sets the post-split authorisation at 1.5bn common shares and 10m preferred shares, down from 15bn and 10m, respectively.
The amendment also deletes entire sections from the “Material Effects” discussion that described the potential increase in authorised but unissued shares under the earlier wording, including a paragraph on how such an increase could have anti-takeover effects.
Lucid said in the filing that “as a matter of Delaware law, the implementation of the Reverse Stock Split does not require a reduction in the total number of authorised shares,” but confirmed it will now reduce the figure in proportion to the split.
If approved by shareholders, the reverse stock split is planned to take place in early September sending the stock price 10x higher while the market cap value remains the same.
The board’s rationale for the reverse split remains unchanged: “to increase the per share trading price of the Company’s common stock” and improve the stock’s appeal to institutional investors restricted from buying low-priced shares.
The EV maker announced the plan on July 17, when its shares closed at $2.29.
Shares have since retreated to levels seen before Lucid unveiled a partnership with Uber and autonomous vehicle startup Nuro, which included a plan to supply at least 20,000 Gravity SUVs over six years.
The stock fell 1.6% to $2.13 in early trading on Friday, about 20 cents above its closing price on July 16, the day before the announcement.
It had risen above $3.65 immediately after the deal was made public, but the gains proved short-lived.
The July 17 announcement of the partnership was followed within minutes by a separate press release on the reverse stock split, further weighing on sentiment.
Interim chief executive Marc Winterhoff told Bloomberg later that day that the split was not being driven by concerns over breaching Nasdaq’s $1 minimum bid requirement, which applies if a stock trades below $1 for 30 consecutive sessions.
Lucid’s shares had previously fallen to $1.93 in November and briefly touched $1.98 in early July.
Winterhoff said the split would enable broader institutional investment, noting that “some institutions cannot buy stocks below a certain threshold.”
As reported on Saturday, Lucid’s fifth-largest institutional shareholder Geode Capital Management increased its holdings to an all-time high in the second quarter.
