Lucid Group has been subpoenaed by securities regulators investigating the electric automaker’s merger that enabled it to become a publicly traded company.
Lucid said in a regulatory filing Monday morning that the Securities and Exchange Commission requested certain documents related to its investigation.
“Although there is no assurance as to the scope or outcome of this matter, the investigation appears to concern the business combination between the Company (f/k/a Churchill Capital Corp. IV) and Atieva, Inc. and certain projections and statements,” Lucid’s regulatory filing says.
Lucid said it is cooperating fully with the SEC in its review.
Shares of Lucid fell more than 9.5% on the news.
In February, Lucid Motors announced that it had reached an agreement to become a publicly traded company through a merger with special purpose acquisition company Churchill Capital IV Corp. At the time, it was considered one of the largest deals between a blank-check company and an electric vehicle startup.
Shareholders approved the merger between Lucid Motors and Churchill Capital IV in late July, after the companies extended the deadline by one day because not enough retail investors showed up to cast their vote. The company is now called Lucid Group.
Since then, Lucid Group has started deliveries of its first all-electric luxury vehicle, the Lucid Air, and announced plans to expand its factory in Casa Grande, Arizona, by 2.7 million square feet. Some of that expansion will be used for Project Gravity, a luxury electric vehicle SUV that is supposed to go into production in 2023.
SPACs, a financial instrument that came back into vogue two years ago, has been framed as a better, faster way for companies to become public. A number of venture capitalists have also jumped into the SPAC game, which has helped propel the pace of deals. But that has also caused regulators to take a closer look at some of these mergers. At least three mobility-related SPAC mergers have come under scrutiny by the SEC. Regulators’ probe into Nikola Motors led to the founder’s resignation and three indictments on charges of fraud. Lordstown Motors is under investigation by the SEC and the Department of Justice.