Prepare more cash!!!LCID may face a negative catalyst on Jan. 19!

LCID has enjoyed a pleasant 2022 so far, as the electric vehicle (EV) maker is up more than 8% year-to-date (YTD).

Last year Lucid’s Air model went on to win the acclaimed MotorTrend Car of the Year award. However, we should keep in mind an upcoming catalyst that has the potential to affect LCID stock. On Jan. 19, the lockup period for existing shareholders of Lucid will expire.

These types of lockup provisions are common for companies such as Lucid that opted to make their public debut by way of a special purpose acquisition company (SPAC) merger. And while LCID stock’s recent performance has been good, some early investors will likely take the opportunity to offload shares, particularly as slower growth has been predicted for the EV sector in 2022.

This isn’t great news for Lucid, as investors pulling out will likely drive down share prices. Indeed, we’ve seen this before. And We must know 5 things about the catalyst:

1. This isn’t the first lockup expiration for Lucid. On Sept. 1, the lockup period for private investment in public equity (PIPE) shares expired. As a result, shares of LCID stock fell by almost 11%.
2. Lucid stock fell more than 22% the week prior to the September PIPE lockup expiration. Tomorrow, Jan. 12, marks a week before the Jan. 19 expiration, so investors may experience some price volatility during that period.
3. The lockup expiration on Jan. 19 may present a buying opportunity. Shares of LCID stock traded more than 35% higher one month after the previous September lockup expiration. Furthermore, shares of LCID stock today are trading higher by over 145% when compared to the closing price on the PIPE lockup expiration day.
4. The Saudi Public Investment Fund (PIF) is the largest shareholder of Lucid stock with a 67.2% stake. However, the fund has a long-term investment horizon, so investors are not anticipating a significant sale.
5. The next lockup expiration date will fall on Jan. 23, 2023. On that day, Churchill sponsors will be allowed to sell their shares. According to the S-1 filing, Churchill sponsors own 51.7 million shares.

On the other hand, as we saw before, LCID stock will likely fall on Jan. 19 as investors pull out. Furthermore, it will likely decline before that in anticipation.

That said, it will likely be quick to rebound, just as it was the first time around. Investors should brace for turbulence as Lucid dips later this month, but they shouldn’t panic. If anything, this may prove to be an opportunity to buy the dip. There’s still plenty of uncertainty facing markets in 2022, Just prepare more cash guys! GLTA!

$Lucid Group Inc(LCID)$