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Lucid Motors Denies Bankruptcy Rumors After Stock Plunge
16 Jul
Summary
- Lucid Group stock plummeted amid unfounded bankruptcy and going-private rumors.
- The company vehemently denied speculation, causing shares to rebound.
- Saudi Arabia's PIF has incurred billions in losses on its Lucid investment.
On July 14th, Lucid Group (LCID) experienced a dramatic stock fluctuation, reaching an all-time low of $2.37 due to circulating rumors that the company was considering going private or filing for Chapter 11 bankruptcy. Lucid categorically denied these reports, which led to a recovery in its stock price. However, the company's shares still closed below $5, the SEC's threshold for penny stocks.
Prior to an anticipated reverse stock split in August 2025, Lucid's stock was already trading at a fraction of its 2021 highs, when its market capitalization neared $100 billion. As of July 14th's closing prices, Lucid's market cap was under $2 billion. The company has faced yearly losses since its 2021 listing, with stock values consistently declining.
The Saudi Arabia Public Investment Fund (PIF) is the most significant loser in absolute terms, having invested in Lucid since 2018 and participated in all subsequent capital raises. PIF has also provided Lucid with a credit line, as the company has been rapidly depleting its cash reserves. This partnership aligns with Saudi Arabia's goal of diversifying its economy away from oil revenues.
Lucid has established and is constructing a second manufacturing facility in Saudi Arabia. The Kingdom has committed to purchasing up to 100,000 Lucid vehicles, a figure significantly higher than Lucid's previously stated production targets.
