Vanguard Group, the largest institutional shareholder of electric vehicle maker Lucid Motors, has increased its stake in the company to a new record high.
The US asset management firm acquired 235,659 shares between July and September and now holds more than 11.35 million shares, according to its third quarter portfolio update.
Vanguard initially acquired 3.55 million shares of Lucid in the third quarter of 2021 (adjusted to the reverse stock split), immediately after the company went public via a merger with special purpose acquisition company (SPAC) Churchill Capital Corp IV.
Despite trimming its position by 20.21% in the final three months of 2021 and by a marginal 0.06% in the second quarter of 2024, Vanguard has consistently increased its stake in the company since its IPO.
The 2.1% increase in the third quarter represents the fifth consecutive quarter and a new record high for Vanguard’s position in the EV maker.
The increased investment follows Lucid‘s reverse stock split, which became effective in early September after shareholder approval.
The company announced plans for the reverse split in July as its share price approached the $1.00 Nasdaq listing requirement threshold.
Marc Winterhoff, the company’s former chief operations officer and interim chief executive since February, denied the move was driven by delisting fears when the plans were announced.
“I don’t think we were anywhere close to below $1 but that was not the reason,” Winterhoff said on the same day the reverse split plans were revealed.
Instead, Winterhoff defended the move as aimed at increasing exposure to institutional investors.
“Its actual reason is that when you are on a certain level or below a certain level, certain institutional investors cannot invest into your stock,” Winterhoff stated, referring to the fact that most brokerage firms do not have stocks priced below $5 to lend to short sellers.
Saudi Arabia’s Public Investment Fund invested more than $1 billion in the California-headquartered company in 2018 and currently holds a stake of about 60% after multiple investment rounds.
Lucid’s Stock Performance
Lucid shares have fallen 43% year to date despite the robotaxi deal announced with Uber and Nuro in which the company has agreed to sell at least 20,000 Gravity SUVs over the next six years.
The much slower than expected production ramp up of its second model, alongside the reduction in its annual production guidance and demand concerns have been contributing for the sluggish year.
Executive Departures Continue
Lucid Motors announced last week another senior departure, the twelfth C-suite or vice president exit in under two years.
Eric Bach, formerly Tesla’s director of engineering, is leaving after more than a decade at the company.
As it did in February to announce the departure of Peter Rawlinson from the CEO and CTO role, Lucid announced the new executive departures immediately after reporting its quarterly financial results.
