As Churchill Capital (NYSE:CCIV) becomes Lucid Motors, the excitement surrounding this event is consistently rising. CCIV becomes LCID on July 23 and this event will have a huge impact on CCIV stock.
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Churchill Capital stock has crashed from the highs of $60 to $25 today. However, the stock is up 163% over the past six months. It looks like the stock is finally picking pace and moving in the upward direction.
I believe it will go higher from here but now is not the time to park your money in CCIV stock. Consumers are already celebrating the beauty of Lucid Air and it has already impressed many prospective buyers, but I believe it is only speculation.
With that in mind, let’s take a look at the investment case for CCIV stock.
Interest Around Lucid Air
Lucid Air is the initial EV model by the company and the initial quality check of the prototypes has been successful. The company plans to go into production with at least 557 cars in 2021. Interestingly, the company has 10,000 reservations for Lucid Air.
This is a clear indicator of interest amongst the consumers. Since people are ready to pay $7,000 for a spot on the waiting list, it is clear that consumers have their hopes high when it comes to the first EV from Lucid. However, the company will have to convert these reservations into revenue and this is where the action lies.
We will only be able to see revenue when the company manages to hold on to the customers and they willingly pay for the EV. For now, it is only a spot on the waiting list.
Less Action, More Speculation
There is a lot of hype and positive energy around Lucid but I believe it is only due to efficient marketing. We have not seen any strong fundamental progress in the company. The EV hasn’t gone under production and the company has no revenue to report.
Lucid Motors is gaining traction due to a lot of talk surrounding Tesla (NASDAQ:TSLA). The growing interest and excitement are the result of efficient and well-timed marketing around the model.
Lucid wants to become the next Tesla and there is a lot of comparison between Tesla EVs and Lucid Air. However, it took a decade for Tesla to reach the current level and it will only be possible to compare the two EVs when both are present. For now, Lucid Air is under works. Too soon to pass a judgment.
As a fundamental-focused investor, I only see numbers based on speculation. There is a lot of energy but no action surrounding it. There are no numbers to focus on, no production date to watch out for, or projections to base an analysis on. It is also not covered by analysts yet so there is no opinion to keep an eye on.
The Bottom Line on CCIV Stock
We are halfway into 2021 and the company has not started production. It aims to sell more than 500 cars this year and this means it has to start making the right moves now. I also believe that the numbers are highly ambitious at this stage. The market is huge but the competition is growing and the company will have to time its production well.
Momentum and marketing are moving CCIV stock. The fundamentals are not available and there is no guarantee of the success of the car. Only if the company produces the targeted number of cars without any glitch, it will look attractive to investors.
The glitz and shine are fine but what about the real cost and earnings?
The stock looks attractive but I would recommend a buy only after it goes into production. This is when the real game starts.
On the date of publication, Vandita Jadeja did not have (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.
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