DETROIT — Buyers misinterpreted a public offering final week by Lucid Group that raised roughly $1.75 billion — and led to the inventory’s worst each day efficiency in almost three years — CEO Peter Rawlinson advised CNBC.

Rawlinson mentioned the elevate, which included a public providing of almost 262.5 million shares of its widespread inventory, was a well timed, strategic enterprise choice to make sure the electrical automobile firm has sufficient capital for its ongoing operations and development plans. It additionally ought to alleviate any potential worries that the corporate would want to concern a “going concern” disclosure concerning its operations, he mentioned.

“We might signaled that we had a money runway to This fall subsequent 12 months. As a Nasdaq firm, now we have to keep away from a going concern. And a going concern is issued inside 12 months of your monetary runway,” Rawlinson mentioned Monday from the corporate’s newly opened workplaces in suburban Detroit. “So, it ought to have been no shock to anyone.”

However Wall Street analysts largely took a adverse view of the transfer resulting from its timing. A number of mentioned the elevate was pointless or got here sooner than anticipated for the corporate, which had $5.16 billion of complete liquidity to finish the third quarter. That included greater than $4 billion in money, money equivalents and funding balances.

The introduced transactions additionally come two months after Lucid mentioned Saudi Arabia’s Public Funding Fund had agreed to produce the corporate with $1.5 billion in cash, because the EV maker seems to be so as to add new fashions to its product line.

“A cap elevate was barely bigger and sooner than we had anticipated,” Morgan Stanley analyst Adam Jonas wrote following the elevate being introduced Wednesday after markets closed.

RBC Capital Markets analyst Tom Narayan shared comparable ideas: “We suspect that traders will marvel why LCID is elevating extra capital simply after it secured the PIF capital in August, and at at the moment depressed share value ranges. We count on Lucid shares to commerce sharply decrease because of this,” he wrote in an investor word Wednesday night time.

Rawlinson on Monday reiterated that the corporate would elevate capital “opportunistically.” He mentioned the corporate’s present funds now safe its capital into 2026, forward of it launching a brand new midsize platform later that 12 months.

“That is precisely as anticipated. It’s precisely to the playbook. It ought to have come as zero shock to anybody,” he mentioned. “And why did I select this second? As a result of I did not need to string it out to the tip, as a result of I did not need to.”

Shares of Lucid declined roughly 18% on Thursday after the announcement — marking the worst each day decline for the corporate since December 2021.

Rawlinson mentioned Lucid is at the moment in a extremely capital-intensive funding interval because it expands its sole U.S. manufacturing unit in Arizona; builds a second plant in Saudi Arabia; prepares to launch its second product, a SUV referred to as Gravity; develops its next-generation powertrain; and builds out its retail and repair community.

“These 5 classes are the long-term funding for the longer term that we’re making now,” Rawlinson mentioned. “Have we bought to chop prices with each automotive we’re making? Completely.”

Final week’s announcement was made along with plans for Lucid’s majority stockholder and affiliate of PIF, Ayar Third Funding Co., to buy greater than 374.7 million shares of widespread inventory from Lucid to keep up its roughly 59% possession of the corporate.

Such a transaction known as professional rata, which permits an investor similar to PIF to take part in future rounds of financing and retain its possession stake. It is one thing the PIF has routinely carried out with Lucid.

Particular person traders have been doubtless involved by share dilution following the motion, however Rawlinson mentioned the continued help of the PIF needs to be considered as a optimistic.

“I feel it has been misinterpreted and misreported,” Rawlinson mentioned. “The norm is to go professional rata. If we did not go professional rata, it certainly can be a sign that the PIF have been dropping religion in us.”

Lucid final week mentioned the general public providing was anticipated to raise about $1.67 billion, with a 30-day possibility for underwriter BofA Securities to buy as much as almost 39.37 million further shares of Lucid’s widespread inventory as effectively.

Lucid has reported report deliveries this 12 months of its present mannequin, an all-electric sedan referred to as Air. The corporate final week reiterated plans to supply 9,000 automobiles this 12 months. Manufacturing of its Gravity SUV is predicted to begin by the tip of this 12 months.

Nonetheless, Lucid’s gross sales and monetary efficiency have not scaled as quickly as expected following larger prices, slower-than-expected demand for EVs, and advertising and marketing and consciousness issues for the corporate.