PIF Lending Out Lucid Stock: BUT WHY? │ Lucid Motors Update TODAY
Overall SentimentBearishStrength: 50%
Overall Thesis
The PIF may be lending out Lucid shares to collect cost-to-borrow revenue while simultaneously accumulating more shares via the preferred share conversion formula as the stock price falls.
Narratives
LCIDLucid Motors
BearishThe speaker explores a theory that the PIF (Saudi Public Investment Fund) may be lending out its 1.37 billion Lucid shares to earn ~26-27% annual cost-to-borrow revenue, while simultaneously benefiting from the preferred share conversion formula — where lower stock prices generate more common shares when preferred shares convert. This creates a perverse incentive for the PIF to keep the stock depressed in the short term. Market makers are also expected to suppress Lucid below $2.50 before Friday's close due to large open interest at that strike.
Key Arguments
- PIF owns 1.37B shares — lending at 26-27% cost-to-borrow would generate significant revenue
- Preferred share formula: lower stock price = more common shares issued on conversion — perverse incentive
- Vanguard and BlackRock may also be inadvertently creating synthetic shares through ETF lending (t+3 overlap)
- Market makers have 177,000 open interest at $2.50 — will suppress stock below that through Friday
- Stock down 1.95% on no Lucid-specific news, just broader market pullback on initial jobless claims
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