Shares of Churchill Capital Corp IV (CCIV) are under pressure on Tuesday after it announced a deal to merge with high-end electric vehicle maker Lucid Motors, in a transaction with an equity value of $11.75B. Several other special-purpose acquisition companies, or SPACs, including Bill Ackman's Pershing Square Tontine (PSTH), also moved into negative territory following the news.

LUCID GOING PUBLIC VIA SPAC MERGER: Following weeks of speculation and media reports, Lucid Motors and Churchill Capital Corp IV have finally announced that they have entered into a definitive merger agreement. CCIV and Lucid are combining at a transaction equity value of $11.75B. The transaction values Lucid at an initial Pro-forma equity value of approximately $24B at the PIPE offer price of $15.00 per share and will provide Lucid with approximately $4.4B in cash.

Peter Rawlinson, CEO, and CTO of Lucid said, "Lucid is proud to be leading a new era of high-technology, high-efficiency zero-emission transportation. Through a ground-up rethinking of how EVs are designed, our in-house-developed, race-proven technology and meticulous engineering have enabled industry-leading powertrain efficiency and new levels of performance. Lucid is going public to accelerate into the next phase of our growth as we work towards the launch of our new pure-electric luxury sedan, Lucid Air, in 2021 followed by our Gravity performance luxury SUV in 2023. Financing from the transaction will also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield purpose-built EV manufacturing facility in North America, and is already operational for pre-production builds of the Lucid Air. Scheduled to expand over three phases in the coming years, our Arizona facility is designed to be capable of producing approximately 365,000 units per year at scale. Lastly, this transaction further enables the realization of our vision to supply Lucid's advanced EV technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial, and utility segments."

The underperformance in shares of Churchill Capital Corp IV comes after the stock gained over 470% since it was first reported that the companies were in discussions for a merger last month. Lucid is led by former-Tesla (TSLA) engineering executive and automotive veteran Peter Rawlinson. Last year, peers Nikola (NKLA) and Fisker (FSR) also went public via a SPAC reverse merger.

OTHERS TO WATCH: The news sent some other higher-profile SPACs into negative territory, including Bill Ackman's Pershing Square Tontine, Foley Trasimene Acquisition II Corp. (BFT), FTAC Olympus Acquisition Corp. (FTOC), Reinvent Technology Partners (RTP), CIIG Merger Corp. (CIIC), Switchback Energy Acquisition Corp. (SBE), and Forum Merger III Corp. (FIII).

PRICE ACTION: In morning trading, shares of Churchill Capital Corp IV have dropped about 27% to $41.89.