Lucid rejects bankruptcy talk after stock whiplash
Lucid said rumors of a bankruptcy filing or go-private move were false after its shares swung wildly and ended Tuesday down 16%.
By Sal Moretti · Money Reporter
3 min read
Lucid’s stock went on a wild ride Tuesday, dropping more than 40% at one point and triggering multiple volatility halts before the electric-vehicle maker pushed back hard on a report about its future.
The shares recovered part of the day’s losses but still finished 16% lower at $4.62, according to CNBC.
The selloff followed a report from EV, a website that covers electric vehicles, that said Lucid was weighing options that could include going private or seeking Chapter 11 bankruptcy protection.
EV reported that Lucid had asked consulting firm AlixPartners to review those possibilities and present findings to the company’s board before its next meeting. The site also reported that AlixPartners had urged further restructuring in the U.S. and Europe and a sharper focus on Lucid’s Gravity SUV.
AlixPartners told CNBC it had no comment on the report.
Lucid calls the report false
Lucid rejected the bankruptcy and go-private claims in a statement to CNBC, saying the “rumors are completely false.”
The company said it has enough cash to run operations “well into next year,” citing its most recent quarterly filings. Lucid also said it had not created a special board committee to study the scenarios described in the report.
Lucid said its work with AlixPartners is focused on improving execution and operations, and on positioning the company to benefit from its technology, products and innovation.
The company added that AlixPartners “has not recommended bankruptcy to management or the Board.”
EV market pressure keeps building
The market drama comes as Lucid faces a tougher backdrop for electric vehicles. CNBC reported that EV adoption has been slower than expected, while policy changes under the Trump administration have altered the industry’s outlook, including the removal of a $7,500 federal incentive for EV purchases.
Lucid is heavily backed by Saudi Arabia’s Public Investment Fund, but the company has been cutting costs as pressure mounts.
Last month, Lucid said it would lay off 18% of its U.S. workforce as part of a cost-saving plan, according to CNBC.
Earlier this month, the automaker missed Wall Street expectations for second-quarter delivery results. Around that time, new CEO Silvio Napoli announced changes to Lucid’s leadership team, saying the move was meant to “simplify the company’s structure.”
In May, Lucid suspended its production guidance while Napoli reviewed the company’s business decisions. He also said Lucid needed to reduce what he called its “elevated inventory” of vehicles.
For now, Lucid’s public message is blunt: the company says bankruptcy has not been recommended to management or the board, and it is focused on tightening operations rather than pursuing the scenarios described in Tuesday’s report.
This story draws on original reporting from CNBC.