Investors who have owned stocks in the last eight months have generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE:SPY) total return since September 18, 2020, is 28.7%. But there is no question some big-name stocks performed better than others along the way.
On that day, Churchill Capital Corp IV (NYSE:CCIV) made its public debut, and IPO investors have significantly outperformed the market in the seven-plus months that have followed.
Churchill’s Big Debut: Churchill Capital CEO and former Citigroup, Inc. (NYSE:C) banker Michael Klein is a Wall Street veteran with a long track record of successful SPAC deals. When Churchill Capital IV went public on Sept. 18, early investors were simply betting on Klein’s ability to secure a worthy acquisition target. On Jan. 11, 2020, Klein did not disappoint, announcing a $15 billion deal to take EV maker Lucid Motors public.
Churchill Capital Corp IV began trading back in September 2020 at $10 per share. The stock spent much of its first three months under its $10 opening price as investors waited patiently for news of a deal. When the Lucid deal was reported in January, Churchill shares took off like a rocket. Churchill hit $20 just three days later.
The stock continued higher in subsequent weeks, ultimately peaking at $64.86 in late February.
Unfortunately, when the deal with Lucid was finally officially announced in late February, traders took it as a sell-the-news event. The deal includes $2.1 billion in cash from Chruchill plus a $2.5 billion private investment in public equity. The PIPE deal is unique in that it is priced at $15 per share rather than the typical price of $10.
The day the deal was officially announced, Churchill's shares dropped back down to around $35. Unfortunately, they have yet to recover.
Recent News: The Lucid Motors merger has yet to be completed, but the company announced just this week that it's bringing on Sherry House, the former treasurer of Alphabet, Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) self-driving unit Waymo, to be its new CFO.
Whether it’s a lack of enthusiasm for SPACs in general or just a lack of momentum for Churchill stock, shares are now trading at around $19.24, near their lowest level since the Lucid deal was first reported.
2021 And Beyond: Still, at the stock’s current level, $1,000 worth of Churchill IPO stock at the $10 listing price back in September would be worth about $1,924 today.
The merger between Churchill and Lucid is expected to close in the second quarter. From that point forward, upside for the stock will hinge on how quickly the company can launch and scale its vehicles and how much additional capital it will need to raise in the process.
Photo courtesy Lucid Motors.