By sampay 
Source: rblfmr / Shutterstock.com
Saudi Arabia increased its stake in electric-vehicle maker Lucid (NASDAQ:LCDs) by 9% last quarter, an SEC filing was disclosed yesterday. The news comes amid speculation about the Middle Eastern country completely taking over the EV maker.
Saudi Arabia Bought More LCID Stock
In the fourth quarter, the country’s Public Investment Fund (PIF) bought nearly 200 million more shares of Lucid, bringing its total position in the automaker to 1.1 billion. The purchases increase the fund’s stake in the EV maker to 62%.
LCID is by far the largest holding in the PIF and the recent purchase has LCID make up close to 25% of the fund’s portfolio. The fund has also recently increased its stake in its second-largest holding Activision Blizzard (NASDAQ:ATVI). Yet ATVI stock only makes up 9% of the fund’s portfolio and it owns just 5% of the videogame maker.
Rumors of a Takeover
Last month, the business news website Betaville reported a rumor that the Saudis could seek to acquire all of the shares of LCID stock that they did not already own. There was also speculation that the country’s investment fund had already been recruited JPMorgan (NYSE:JPM) to work on such a deal.
The fund invested $1 billion in LCID in 2018, before the automaker’s shares were publicly traded. And in April 2022, the Saudi government announced it would purchase 50,000 EVs from Lucid. The country intends to buy 1,000 to 2,000 EVs annually from Lucid.
More About Lucid
As of yesterday’s market close, LCID stock has soared 51% so far this year. However, the automaker’s shares are still down 64% in the last year and had slumped 10% in the previous five trading days.
On Jan. 23, Citi resumed coverage of LCID stock with a “buy” rating. The firm is upbeat about the “company’s technology and product positioning.”
On the other hand, I’ve been bearish on the name, citing Lucid’s lack of brand strength and tremendous competition.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.