Lucid Is a Penny Stock

By Douglas A. McIntyre Published Aug 7, 9:15AM EDT

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Lucid Group Inc. (NASDAQ: LCID) fell to penny stock level because it is unlikely to survive.
The EV maker’s offerings are too few and too expensive.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and Lucid wasn't one of them. Get them here FREE.

Lucid Is a Penny Stock — © Public Domain / Wikimedia Commons

Lucid Group Inc. (NASDAQ: LCID | LCID Price Prediction) stock is down 28% to $2.18, while the S&P 500 is 8% higher. It is a penny stock, which is a stock with a price under $5. In five years, its market cap has dropped almost 80% to $6.7 billion.

One reason the stock has moved to penny stock level is the chance that it will never recover because Lucid is so small and operates in the troubled U.S. electric vehicle (EV) sector. According to Cox Automotive, U.S. EV sales fell 6.3% in the second quarter to 310,839. EVs face huge headwinds at a time when they were supposed to be booming. Small EV companies will not make it in this environment. In a faltering market, competition is ferocious.

The Lucid stock price collapse was partly due to it cutting back its forecast of production for the year to a range of 18,000 to 20,000. Earlier in the year, management put the figure at 20,000. Interim CEO Marc Winterhoff tried to steady investors. He told CNBC, “I have never seen so many surprises within a year as this year. So all of those plans are still set up for where we were before, but we just want to be a little bit more cautious and, therefore, provide a range.” He was whistling past the graveyard.

Lucid’s quarterly results show how small the chance is that it can survive while larger companies try to shoehorn themselves into the market. On the one side is Tesla, wounded but still the U.S. market share leader. On the other side are legacy behemoths like GM. They have invested tens of billions of dollars in what they believe is the future of the industry.

Lucid posted an adjusted loss of $0.24 per share. Wall Street had expected $0.21. Revenue for the quarter was $259 million, compared to expectations of $280 million. The company’s net loss was $855 million, compared to $790 million in last year’s period. Lucid only delivered 3,309 vehicles in the quarter.

Investors did not seem to care that Uber would make an investment of $300 million and plans to build 20,000 robotaxis in the next six years.

Of all Lucid’s mistakes, the most damaging was to sell a sedan with a base price of $70,990 and prices that rise to as high as $249,000. According to most research, American EV sedans have prices below $30,000.

Lucid Stock Price Prediction and Forecast 2025-2030

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.