May 17, 2021
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Transcript

Marko Rojnica

CCIV is a company that Michael Klein took public through a SPAC… and they own a portion of Lucid Motors. What’s Lucid Motors? Maybe the next Porsche of EV? From the get-go there was a LOT of hype in this SPAC. I mean, just take a look at this chart! Going from $10 all the way to $65. Everyone’s thinking this thing is hitting $100 and once it does it’s going to the moon!

Every single news publication was talking about it, hyping it up. Everything was going great, people are making money, there’s no stopping us. But all of a sudden, the stock started falling apart, going from $65 to $36... And then THIS happened! A complete nightmare! The stock started trading off from $36 all the way down to $18, where we are right now.

So, where’s this stock going, and how can we use Options to profit from it? I’ll walk you through the Bull case and the Bear case. Then, we’ll get Felix Frey on to give us his view of the stock, and what you can do with Options. Stay tuned, you don’t want to miss it!

So, we have a stock that rallied on the merger news with Lucid Motors, making a jump as high as 500% and more, only to trade off to a level of $19, where we are right now. My name is Marko Rojnica and I’m going to lead you through the Bull points and the Bear points of CCIV. Then I’m going to get Felix Frey on to show us HIS view on the stock, and most importantly, he’s going to show us different options plays that you can do whether you’re bullish or bearish on the stock.

So, let’s get started with what the Bulls are saying about CCIV and Lucid Motors.

1) Michael Klein & Saudi Investments

Michael Klein is a Wharton Graduate who worked at Citigroup from 1985 to 2009 holding many roles including CEO of Global Banking and vice chairman of the entire company. He’s also a legendary dealmaker who has been involved in the process of SEVERAL large mergers from public companies.

At this point, he’s executed 7 SPACs, one of which is CCIV merger with Lucid Motors. In the deal, CCIV put down $2.1 billion in cash, and there is also an additional $2.5 billion in a PIPE deal. Saudi Arabia Private Investment Fund is also heavily involved in the name with a large % ownership.

Based on today’s price of CCIV, at around $18, Lucid Motors is valued at approximately $30 billion.

With a backing of a successful businessman and dealmaker, Michael Klein, many investors are, and have been, showing confidence in Lucid. Adding to that, the fact that Saudi Arabia’s investors are big backers of the company, in my opinion, is a very bullish sign because these guys are aware that EV is the future and that their oil dependence must decrease. BUT not only that…

They also know that in order to keep their money and influence, they need to jump into the next “big thing,” which is renewable energy, and EVs. Now that I mentioned the Saudi’s, that leads me to my 2nd bullish point, and that is…

2) Lucid is the next Porsche of EV

A couple of years ago, everybody had the same question:

“Why are EVs so ugly???”

And until Tesla showed up, that really was the case. But now as the market is expanding, it’s only natural that we get different EVs for different audiences. That’s where the Top 1% and Lucid Motors meet. Their models range from $70,000 to $160,000 and honestly, the car looks absolutely amazing! When I see Lucid’s Air Models, I’m instantly thinking:

  • Audi A8
  • BMW 7 Series
  • Mercedes S-Class
  • Porsche Panamera

And that’s exactly the target audience that Lucid is going after. The rich and wealthy who like to drive high-end, technologically advanced vehicles, with one main twist… Electric Vehicle. Because for the Top 1%, it’s all about prestige and glamour, and most importantly, the price doesn’t play a huge role when it comes to buying a car, because they can easily afford it. And what’s THE one place where this is really prominent?

You’ve guessed it… Saudi Arabia. They are their own perfect customer, and they know exactly what the Top 1% are looking for. They’re looking for their next daily driver and that is Lucid Air. This leads me to the Bull point #3, and that is…

3) A Different Buying Experience & Production Process

As Lucid follows in Tesla’s footsets to disrupt the car dealership model, that means no dealerships with nightmare price bargaining, fast-talking salespeople and a ton of paperwork. Tesla and Lucid have done what appears to be the preferred path for a direct sales model.

And while this will likely save on overhead, it also accomplishes a more personal and relaxed experience for the modern car buyer. Especially, a Top 1% car buyer.

The Lucid experience is similar to Tesla with a luxury twist. These showrooms are meant to act as an initial point of contact and not much more. Locations will offer test drives, but the entire ordering process will be done online. With these smaller locations, vehicle deliveries to customers would be a logistical nightmare!

But instead, Lucid will have other locations dedicated to deliveries and service as well. Adding to that pleasant and futuristic experience of buying a car, let’s also take a look at the production process and what the CEO says.

Lucid is pursuing a slightly different path to market than some of its peers. It wants to be asset heavy, believing controlling manufacturing is critical for success in the auto business.

“Manufacturing is too critical an activity to entrust with a third party,” Lucid CEO Peter Rawlinson told Barron’s in a recent interview, pointing out someone has to own the assets that build the cars.

He believes the owners of the assets have the biggest opportunity for profits. Lucid seems to be taking a very good approach in my opinion, where they are taking full control of their production process, which is going to be very beneficial when it comes to fulfilling their quotas and estimates.

And now that we mention the estimates, let’s actually take a look at the bullish points we’ve made, before we go into the bear arguments.

From 2022 to 2026, the company is predicting a jump from $2.2 billion to $22.7 billion in revenue. This is a huge increase over a very short period of time, but with backing of:

  • Michael Klein & The Saudi Arabia Investment Fund
  • With the company’s focus on creating a luxury high-end EV brand targeted at the Top 1% of buyers…
  • Combined with a futuristic purchasing experience and autonomous production process

Lucid might as well hit those estimates and prove to be a very successful company in the luxury EV space…

Or… not everything turns out as expected and perhaps bears turn out to be right?

Here’s what the bears are saying and have been saying for a while now…

1) Michael Klein selloff?

We’ve established that Michael Klein is a great asset to the company, along with the Saudi Investors and other names involved. And remember, Michael Klein is first and foremost, a great businessman and a great investor.

He’s sitting on Billions of dollars he made in this deal and he might be tempted to take out some profits once the lockup period is over. He is in it to win it, and winning it means making money.

And it might not only be him, I’m sure there’s a lot of other insiders that have made some good money so far who might be looking to cash out. They haven’t sold anything yet, but as time goes on that’s most likely going to change. So, definitely keep this in mind when looking into Lucid Motors as a potential investment, both long term and short term.

Now, let me show you the biggest bear red flag I see with CCIV and that is…

2) They’re trying to do too many things at once

A few minutes ago, we just mentioned how Lucid is the next Porsche of EV, right? Well, how is that ever going to happen if the CEO Peter Rawlinson LAOS has ambitions to jump into the affordable space, with a vision for a $25,000 vehicle.

To do this, Lucid is "hoping to work with mass-market carmakers to get its technology into production as soon as possible,“ because although there is a "need to get millions of $25,000 cars into production fast to save the planet,“ Lucid's position leaves that goal about eight to nine years out, EVEN with the right technological developments.

As such, a deal with "Honda, Hyundai or Toyota“ could allow this vision to surface in half the time, about four years, should Lucid be able to secure a deal with one of the major carmakers after having been in talks with unnamed ones earlier this year.

Here’s the problem.

You can’t be both a high-end EV car aiming at the Top 1% and have a $25,000 car. Do you think a guy who paid $100,000 for his brand new Lucid Air will be happy when he’s on a red light, and next to him comes a guy with a $25,000 Lucid, nodding his head like: “Hey, you’ve got a Lucid too, cool!”

No, he’s not going to like that at all, okay. The car you drive is a part of your overall image and social identity. Now, you might say, well, Tesla has both a cheap and an expensive car. Well, Tesla was the first company to make the EV market… what it is today. They’re light years ahead of Lucid in terms of production experience, capabilities and deliveries. Remember, Lucid hasn’t rolled out a single car yet.

Plus, why would they ever want to be Tesla when they can be the EV car of the rich? When they can be the Porsche or Ferrari of the EV space. To relate to this point, let’s move on to the last Bear argument…

3) Can they actually deliver and make these cars as promised?

One of the bullish arguments we made was the advantage of having a strong, independent production process they can control. But with the CEO saying they’re looking for partnerships with “budget” carmakers such as Honda, Hyundai and Toyota, in order to produce millions of $25,000 cars to save the planet…

That tends to blur a lot of estimates and numbers they’re basing their future value off of. And why is that? Because then they’re not in control. As of today, like we said, they haven’t delivered a single car yet… And to make things better, you have Tesla being in a supply constraint.

You also have Ford, GM and other big carmakers that had to halt production due to supply shortages. To fulfill these estimates, Lucid needs to get very serious about securing their supplies, organizing their logistics and pretty much being perfect. And even if they do… does that guarantee they’ll be able to get their hands on all the materials needed such as lithium, nickel, and cobalt?

What about Chips? Plus, you’re going to have every other big name, like Tesla, Ford, GM, VW, Toyota, competing for these same materials. Also, they’re basing a lot of their numbers based on reservations, which are fully refundable. In the case of Tesla Model 3, you had 550,000 reservations out of which 23% were cancelled. But even if the cancellation rate is insignificant, that was the 1st group of buyers who are oftentimes referred to as the “early adopters.”

Selling to the 2nd, and 3rd group is going to be a challenge by itself. So, if they’re looking to take market share from Porsche, Ferrari or high-end Germans, do you think that’s going to be an easy task?

These brands have been around for decades and they have very, very loyal audiences. Brands take time, and you can’t be “everybody’s” brand.

Like I mentioned earlier, CCIV’s price of about $18 values Lucid Motors at around $30 billion. Do you think that’s a realistic valuation given that Porsche is valued at $31 billion, and Ferrari is valued at $49 billion? Remember, Lucid hasn’t delivered a single car yet.

So… I sincerely hope they stick to their original plan of being a high-end car manufacturer NOT looking to produce millions of $25,000 budget cars that are going to hurt their image. Now, here’s a quick rundown of the bullish and the bearish points:

Bullish Points

  • Lucid Motors has Michael Klein & Saudi Investors behind the company
  • Lucid has the potential to become the next Porsche of EV
  • Lucid has a Different Buying Experience & Production Process
  • Bearish Points

  • Michael Klein & Investors Might be selling off to take in profits
  • They are trying to be both a high-end and a cheap car brand
  • Can they actually deliver these cars & meet the estimate numbers
  • So, that was the rundown of CCIV Lucid Motors, where we looked at the bearish and bullish points, but now it’s time to get Felix Frey on, where he’ll be showing us his view on the stock, where it might go and most importantly, he’s going to show us how to play CCIV using options, no matter if you’re looking for a short-term or a long-term play, and no matter if you’re bullish or bearish, so stick around, the best is about to come!

    Felix Frey

    Coming soon

    Marko Rojnica

    Thank you Felix for giving us a few different Options Trades to consider in CCIV. Now, if you enjoyed the video, please leave a like and if you’d like to see more stock analysis just like this one, make sure you subscribe to the channel and turn on the bell notifications.

    Also, I would love to hear your thoughts on CCIV and Lucid, and I’d like you to add to the story.

    Comment your thoughts & opinions on the bullish & bearish cases we’ve made and tell us where you think Lucid & CCIV are going next. Don’t forget, we also do a livestream Monday through Thursday at 1pm ET on the Winning Picks Podcast where we discuss different Options trading ideas, answer your questions and help you trade Options like the Top 1%.

    Thank you, I’ll see you in the next one.

    Watch Next

    ARKK & TSLA Selloff?

    Wall Street Stories: UOA (Then vs Now)

    Find Your Next Idea


    Transcript

    Marko Rojnica

    CCIV is a company that Michael Klein took public through a SPAC… and they own a portion of Lucid Motors. What’s Lucid Motors? Maybe the next Porsche of EV? From the get-go there was a LOT of hype in this SPAC. I mean, just take a look at this chart! Going from $10 all the way to $65. Everyone’s thinking this thing is hitting $100 and once it does it’s going to the moon!

    Every single news publication was talking about it, hyping it up. Everything was going great, people are making money, there’s no stopping us. But all of a sudden, the stock started falling apart, going from $65 to $36... And then THIS happened! A complete nightmare! The stock started trading off from $36 all the way down to $18, where we are right now.

    So, where’s this stock going, and how can we use Options to profit from it? I’ll walk you through the Bull case and the Bear case. Then, we’ll get Felix Frey on to give us his view of the stock, and what you can do with Options. Stay tuned, you don’t want to miss it!

    So, we have a stock that rallied on the merger news with Lucid Motors, making a jump as high as 500% and more, only to trade off to a level of $19, where we are right now. My name is Marko Rojnica and I’m going to lead you through the Bull points and the Bear points of CCIV. Then I’m going to get Felix Frey on to show us HIS view on the stock, and most importantly, he’s going to show us different options plays that you can do whether you’re bullish or bearish on the stock.

    So, let’s get started with what the Bulls are saying about CCIV and Lucid Motors.

    1) Michael Klein & Saudi Investments

    Michael Klein is a Wharton Graduate who worked at Citigroup from 1985 to 2009 holding many roles including CEO of Global Banking and vice chairman of the entire company. He’s also a legendary dealmaker who has been involved in the process of SEVERAL large mergers from public companies.

    At this point, he’s executed 7 SPACs, one of which is CCIV merger with Lucid Motors. In the deal, CCIV put down $2.1 billion in cash, and there is also an additional $2.5 billion in a PIPE deal. Saudi Arabia Private Investment Fund is also heavily involved in the name with a large % ownership.

    Based on today’s price of CCIV, at around $18, Lucid Motors is valued at approximately $30 billion.

    With a backing of a successful businessman and dealmaker, Michael Klein, many investors are, and have been, showing confidence in Lucid. Adding to that, the fact that Saudi Arabia’s investors are big backers of the company, in my opinion, is a very bullish sign because these guys are aware that EV is the future and that their oil dependence must decrease. BUT not only that…

    They also know that in order to keep their money and influence, they need to jump into the next “big thing,” which is renewable energy, and EVs. Now that I mentioned the Saudi’s, that leads me to my 2nd bullish point, and that is…

    2) Lucid is the next Porsche of EV

    A couple of years ago, everybody had the same question:

    “Why are EVs so ugly???”

    And until Tesla showed up, that really was the case. But now as the market is expanding, it’s only natural that we get different EVs for different audiences. That’s where the Top 1% and Lucid Motors meet. Their models range from $70,000 to $160,000 and honestly, the car looks absolutely amazing! When I see Lucid’s Air Models, I’m instantly thinking:

    • Audi A8
    • BMW 7 Series
    • Mercedes S-Class
    • Porsche Panamera

    And that’s exactly the target audience that Lucid is going after. The rich and wealthy who like to drive high-end, technologically advanced vehicles, with one main twist… Electric Vehicle. Because for the Top 1%, it’s all about prestige and glamour, and most importantly, the price doesn’t play a huge role when it comes to buying a car, because they can easily afford it. And what’s THE one place where this is really prominent?

    You’ve guessed it… Saudi Arabia. They are their own perfect customer, and they know exactly what the Top 1% are looking for. They’re looking for their next daily driver and that is Lucid Air. This leads me to the Bull point #3, and that is…

    3) A Different Buying Experience & Production Process

    As Lucid follows in Tesla’s footsets to disrupt the car dealership model, that means no dealerships with nightmare price bargaining, fast-talking salespeople and a ton of paperwork. Tesla and Lucid have done what appears to be the preferred path for a direct sales model.

    And while this will likely save on overhead, it also accomplishes a more personal and relaxed experience for the modern car buyer. Especially, a Top 1% car buyer.

    The Lucid experience is similar to Tesla with a luxury twist. These showrooms are meant to act as an initial point of contact and not much more. Locations will offer test drives, but the entire ordering process will be done online. With these smaller locations, vehicle deliveries to customers would be a logistical nightmare!

    But instead, Lucid will have other locations dedicated to deliveries and service as well. Adding to that pleasant and futuristic experience of buying a car, let’s also take a look at the production process and what the CEO says.

    Lucid is pursuing a slightly different path to market than some of its peers. It wants to be asset heavy, believing controlling manufacturing is critical for success in the auto business.

    “Manufacturing is too critical an activity to entrust with a third party,” Lucid CEO Peter Rawlinson told Barron’s in a recent interview, pointing out someone has to own the assets that build the cars.

    He believes the owners of the assets have the biggest opportunity for profits. Lucid seems to be taking a very good approach in my opinion, where they are taking full control of their production process, which is going to be very beneficial when it comes to fulfilling their quotas and estimates.

    And now that we mention the estimates, let’s actually take a look at the bullish points we’ve made, before we go into the bear arguments.

    From 2022 to 2026, the company is predicting a jump from $2.2 billion to $22.7 billion in revenue. This is a huge increase over a very short period of time, but with backing of:

    • Michael Klein & The Saudi Arabia Investment Fund
    • With the company’s focus on creating a luxury high-end EV brand targeted at the Top 1% of buyers…
    • Combined with a futuristic purchasing experience and autonomous production process

    Lucid might as well hit those estimates and prove to be a very successful company in the luxury EV space…

    Or… not everything turns out as expected and perhaps bears turn out to be right?

    Here’s what the bears are saying and have been saying for a while now…

    1) Michael Klein selloff?

    We’ve established that Michael Klein is a great asset to the company, along with the Saudi Investors and other names involved. And remember, Michael Klein is first and foremost, a great businessman and a great investor.

    He’s sitting on Billions of dollars he made in this deal and he might be tempted to take out some profits once the lockup period is over. He is in it to win it, and winning it means making money.

    And it might not only be him, I’m sure there’s a lot of other insiders that have made some good money so far who might be looking to cash out. They haven’t sold anything yet, but as time goes on that’s most likely going to change. So, definitely keep this in mind when looking into Lucid Motors as a potential investment, both long term and short term.

    Now, let me show you the biggest bear red flag I see with CCIV and that is…

    2) They’re trying to do too many things at once

    A few minutes ago, we just mentioned how Lucid is the next Porsche of EV, right? Well, how is that ever going to happen if the CEO Peter Rawlinson LAOS has ambitions to jump into the affordable space, with a vision for a $25,000 vehicle.

    To do this, Lucid is "hoping to work with mass-market carmakers to get its technology into production as soon as possible,“ because although there is a "need to get millions of $25,000 cars into production fast to save the planet,“ Lucid's position leaves that goal about eight to nine years out, EVEN with the right technological developments.

    As such, a deal with "Honda, Hyundai or Toyota“ could allow this vision to surface in half the time, about four years, should Lucid be able to secure a deal with one of the major carmakers after having been in talks with unnamed ones earlier this year.

    Here’s the problem.

    You can’t be both a high-end EV car aiming at the Top 1% and have a $25,000 car. Do you think a guy who paid $100,000 for his brand new Lucid Air will be happy when he’s on a red light, and next to him comes a guy with a $25,000 Lucid, nodding his head like: “Hey, you’ve got a Lucid too, cool!”

    No, he’s not going to like that at all, okay. The car you drive is a part of your overall image and social identity. Now, you might say, well, Tesla has both a cheap and an expensive car. Well, Tesla was the first company to make the EV market… what it is today. They’re light years ahead of Lucid in terms of production experience, capabilities and deliveries. Remember, Lucid hasn’t rolled out a single car yet.

    Plus, why would they ever want to be Tesla when they can be the EV car of the rich? When they can be the Porsche or Ferrari of the EV space. To relate to this point, let’s move on to the last Bear argument…

    3) Can they actually deliver and make these cars as promised?

    One of the bullish arguments we made was the advantage of having a strong, independent production process they can control. But with the CEO saying they’re looking for partnerships with “budget” carmakers such as Honda, Hyundai and Toyota, in order to produce millions of $25,000 cars to save the planet…

    That tends to blur a lot of estimates and numbers they’re basing their future value off of. And why is that? Because then they’re not in control. As of today, like we said, they haven’t delivered a single car yet… And to make things better, you have Tesla being in a supply constraint.

    You also have Ford, GM and other big carmakers that had to halt production due to supply shortages. To fulfill these estimates, Lucid needs to get very serious about securing their supplies, organizing their logistics and pretty much being perfect. And even if they do… does that guarantee they’ll be able to get their hands on all the materials needed such as lithium, nickel, and cobalt?

    What about Chips? Plus, you’re going to have every other big name, like Tesla, Ford, GM, VW, Toyota, competing for these same materials. Also, they’re basing a lot of their numbers based on reservations, which are fully refundable. In the case of Tesla Model 3, you had 550,000 reservations out of which 23% were cancelled. But even if the cancellation rate is insignificant, that was the 1st group of buyers who are oftentimes referred to as the “early adopters.”

    Selling to the 2nd, and 3rd group is going to be a challenge by itself. So, if they’re looking to take market share from Porsche, Ferrari or high-end Germans, do you think that’s going to be an easy task?

    These brands have been around for decades and they have very, very loyal audiences. Brands take time, and you can’t be “everybody’s” brand.

    Like I mentioned earlier, CCIV’s price of about $18 values Lucid Motors at around $30 billion. Do you think that’s a realistic valuation given that Porsche is valued at $31 billion, and Ferrari is valued at $49 billion? Remember, Lucid hasn’t delivered a single car yet.

    So… I sincerely hope they stick to their original plan of being a high-end car manufacturer NOT looking to produce millions of $25,000 budget cars that are going to hurt their image. Now, here’s a quick rundown of the bullish and the bearish points:

    Bullish Points

  • Lucid Motors has Michael Klein & Saudi Investors behind the company
  • Lucid has the potential to become the next Porsche of EV
  • Lucid has a Different Buying Experience & Production Process
  • Bearish Points

  • Michael Klein & Investors Might be selling off to take in profits
  • They are trying to be both a high-end and a cheap car brand
  • Can they actually deliver these cars & meet the estimate numbers
  • So, that was the rundown of CCIV Lucid Motors, where we looked at the bearish and bullish points, but now it’s time to get Felix Frey on, where he’ll be showing us his view on the stock, where it might go and most importantly, he’s going to show us how to play CCIV using options, no matter if you’re looking for a short-term or a long-term play, and no matter if you’re bullish or bearish, so stick around, the best is about to come!

    Felix Frey

    Coming soon

    Marko Rojnica

    Thank you Felix for giving us a few different Options Trades to consider in CCIV. Now, if you enjoyed the video, please leave a like and if you’d like to see more stock analysis just like this one, make sure you subscribe to the channel and turn on the bell notifications.

    Also, I would love to hear your thoughts on CCIV and Lucid, and I’d like you to add to the story.

    Comment your thoughts & opinions on the bullish & bearish cases we’ve made and tell us where you think Lucid & CCIV are going next. Don’t forget, we also do a livestream Monday through Thursday at 1pm ET on the Winning Picks Podcast where we discuss different Options trading ideas, answer your questions and help you trade Options like the Top 1%.

    Thank you, I’ll see you in the next one.

    >