Lucid Shares Drop 80%

"In fact, Barron's reports, "Traders sometimes see reverse stock splits as a sign that a share price will fall further, just as they see traditional stock splits as a source of upside." Lucid management has to hope that is not correct. Its stock is down 80% over the past five years, while the S&P 500 is up by over 90%."

"Lucid has lost billions of dollars in a quest to take a large share of the U.S. EV market. The effort has been a dismal failure, as shown by its poor unit sales, weak balance sheet, and negative profit and loss statement. In the second quarter of the year, Lucid produced just 3,863 vehicles, a tiny number, and delivered only 3,309. It reduced production estimates for the year from 20,000 to a range of 18,000 to 20,000."

"Lucid has at least two problems it cannot overcome. First is that its most inexpensive product is the Lucid Pure at $69,600. The Lucid Air Grand Touring has a base price of $114,900. High prices have hampered EV sales in the United States. Most companies that want to win the U.S. EV race are pushing for a $25,000 product. Lucid's second problem is that Tesla still has just shy of 50% of U.S. EV sales. Almost every legacy car company is pushing into the market."

Lucid Group announced a 1-for-10 reverse stock split, moving shares from just above $2 to just above $20 without changing market capitalization. The company's stock has fallen about 80% over five years while the S&P 500 rose over 90%. Lucid produced 3,863 vehicles and delivered 3,309 in the second quarter and trimmed annual production guidance to 18,000–20,000 units. Second-quarter net loss totaled $855 million on $259 million revenue, compared with a $790 million loss on $201 million a year earlier. High vehicle prices and fierce competition from Tesla, legacy automakers, and Chinese makers constrain Lucid's market prospects.

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