EV maker Lucid gets SEC subpoena on $24-bln blank-check deal

Lucid joins several other electric-car makers being investigated by federal agencies and regulators as they rush to meet production targets and catch up with Tesla Inc, which the world's most valuable automaker. Nikola is working with the U.S. regulators to pay a penalty and settle a charge against founder Trevor Milton for using social media to repeatedly mislead investors, while Lordstown Motors is being investigated for vehicle pre-orders and its merger with a shell company.

The U.S. securities regulator has asked Lucid Group Inc for documents related to an investigation into its blank-check deal, joining a growing list of companies that have come under scrutiny for their merger with shell companies. Shares of the luxury electric-car maker fell about 13% on Monday after the company disclosed it had received a subpoena from the U.S. Securities and Exchange Commission (SEC) on Dec. 3.

"The investigation appears to concern the business combination between the Company (Churchill Capital Corp. IV) and Atieva Inc and certain projections and statements," Lucid said in a regulatory filing https://bit.ly/32TtoSE. Lucid's deal with veteran dealmaker Michael Klein's blank-check acquisition firm earlier this year had given the combined company a pro-forma equity value of $24 billion.

It was one of the biggest in a string of deals with Special Purpose Acquisition Companies that included electric vehicle makers Nikola Corp and Fisker Inc. The SEC declined to comment on its action against Lucid.

Shares in other electric-vehicle startups including Canoo , Faraday Future and Fisker also took hit in early trading. Lucid joins several other electric-car makers being investigated by federal agencies and regulators as they rush to meet production targets and catch up with Tesla Inc, which the world's most valuable automaker.

Nikola is working with the U.S. regulators to pay a penalty and settle a charge against founder Trevor Milton for using social media to repeatedly mislead investors, while Lordstown Motors is being investigated for vehicle pre-orders and its merger with a shell company. "Ever since the statements made by Nikola's founder and former CEO resulted in three federal criminal fraud charges, new EV manufacturers were bound to face greater scrutiny from regulators attempting to protect investors," CFRA analyst Garrett Nelson said.

However, Lucid's long-term targets were "reasonable" and there were positive reviews of its first model, the Lucid Air, Nelson said. Meanwhile, the SEC has opened an investigation into Tesla following a whistleblower complaint on fire risks associated with solar panel system defects over several years.

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