Shares of Lucid Group (LCID) fell by approximately 50% on Tuesday, with trading halted three times due to the sudden drop. This decline was triggered by a report suggesting that the electric vehicle manufacturer might be considering going private or filing for bankruptcy.
The report emerged from EV, an industry outlet, indicating that restructuring firm AlixPartners is set to present options to Lucid's board. Among these options, going private and Chapter 11 bankruptcy surfaced prominently. Chapter 11 allows a company to continue its operations while reorganizing its debts.
In the wake of the report, Lucid’s shares dropped as much as 55%, hitting a record low of $2.37. This decline erased nearly half of the company's market value, which had been close to $90 billion in November 2021, briefly surpassing that of Ford. As of now, the company's total shares amount to 330 million, valued at under $800 million.
Lucid's public relations team quickly denied the bankruptcy speculations. Nick Twork, Chief Communications Officer, stated that AlixPartners is assisting in improving operational efficiency, not preparing for any legal proceedings. He emphasized the company's liquidity, claiming they have enough cash to sustain operations for the foreseeable future.
Despite the denial, concerns lingered, especially as Lucid reported a $2.7 billion loss for 2025, followed by another $1.03 billion loss in the first quarter of the current year. As the company prepares for its earnings report on August 4, market sentiments remain cautious. The uncertainty reflects a broader trend in the EV market, influenced by recent stock performance across the industry, including speculation around Lucid Motors.
This article is for informational purposes only and should not be considered financial advice.
