CCIV Stock Price Has Risen 8% last month – Time to Buy CCIV?

Churchill Capital IV (CCIV) stock has been very volatile. It has bounced back from the lows and is now up almost 8% over the last month. What’s the forecast for CCIV stock and should you buy it now?

CCIV is set to merge with Lucid Motors which is a startup EV (electric vehicle) company in the pre-revenue stage. The merger vote is set for July 22 and subject to shareholder approval CCIV will merge with Lucid Motors on July 23.

CCIV stock technical analysis

CCIV stock is looking bullish on the charts and trades above the 10-day, 50-day, and 100-day SMA. It, however, trades below the 20-day and 30-day SMA. It has been trading in a narrow price channel between the 50-day and 20-day SMA. While the 20-day SMA has been a resistance, the stock has found a strong support near the 50-day SMA. The 14-day RSI (relative strength index) is 50.5 which indicates neither overbought nor oversold positions. There has been strong buying support for CCIV stock below the $20 price level.

CCIV to merge with Lucid Motors

After the merger, the new entity will trade under the ticker symbol LCID. SPAC (special purpose acquisition company) mergers have been the preferred mode for startup companies in the EV ecosystem. A SPAC merger allows pre-revenue companies like Lucid Motors to give forward guidance which provides a valuation framework. Under the current regulations, companies opting for a traditional IPO cannot provide forecasts for their earnings. This regulatory arbitrage between IPOs and SPACs has helped many start-up companies to go public early. They have managed to pull forward their listings by a couple of years amid the SPAC boom.

CCIV stock forecast

Since Lucid Motors is not yet publicly traded not many Wall Street analysts are actively following CCIV stock. However, it would attract a lot of attention from analysts post listing as many see Lucid Motors as a formidable competitor to Tesla.

Evercore ISI is among those brokerages which are bullish on CCIV before the merger with Lucid Motors. “From the outset, we noticed how the low stance of the sedan, the smoothness of the car’s suspension (even over the cobblestone roads of lower Chelsea), and the Air’s iconic glass ceiling combine to create a unique luxury experience. As part of the highway portion of the test ride, our driver provided us with a preview of the power of the sedan’s EV powertrain, which we believe holds its own versus TSLA models,” said Evercore ISI analysts in their note. Jim Cramer is also bullish on CCIV stock.

Lucid Motors CEO Peter Rawlinson is upbeat

Lucid Motors CEO Peter Rawlinson is bullish on the company’s outlook. The company’s first model Lucid Air has received over 10,000 reservations. “These are bona fide reservations with reasonable down payments. Some people even paid more than $ 7,000 down payment,” said Rawlinson. Investors have been wary of the pre-bookings after Lordstown Motors admitted that some of its preorders were inflated. Also, some companies allow pre-bookings with only a few hundred dollars which is very easy to manipulate.

According to Rawlinson, “There really isn’t such a thing as a ‘market for EVs.’ There’s a market for cars, and with great EVs like the Lucid Air that we’re launching this year, we’re going to get more penetration into the internal combustion engine market, more EVs taking the place of gasoline burners.” Musk has also mocked gasoline cars several times. Rawlinson, who is a former Tesla executive sees the EV industry as a two-horse race between Tesla and Lucid Motors.

CCIV stock long term forecast

Over the long term, the demand for EVs is expected to rise multi-fold. However, the competition is too intensifying in the industry. Legacy automakers like Ford and General Motors are also doubling down on EVs. There are several pure-play EV companies including NIO, Xpeng Motors, and Li Auto that are also looking to grab market share. Then we also have start-up EV names like Fisker, Canoo, and Nikola that like Lucid Motors are in the pre-revenue stage. Apple is also rumored to get into the EV industry. Rawlinson said that he welcomes “competition from a company like Apple.”

Lucid Motors forecast

Coming back to CCIV stock, the stock should fall after the merger with Lucid Motors. Almost all the SPACs have suffered the “post-merger fatigue” and things look no different for CCIV as it gets set to merge with Lucid Motors.

Looking at the current stock price of CCIV, Lucid Motors has a market cap of around $38 billion which looks a bit too high. Meanwhile, if CCIV stock falls sharply, it could be an opportunity to buy this EV name. However, at current prices, CCIV looks a bit pricey.

CCIV stock was trading over 1% higher in early trading today. The stock has a 52-week trading range of $9.60-$64.86.