Lucid’s Stock Collapses–Again
Lucid's new CEO unveiled a sweeping list of fixes, partnerships, and bold promises, but Wall Street responded by punishing the stock hard. The question now is whether the company can survive long enough to compete in markets dominated by rivals…
Lucid’s (NASDAQ: LCID | LCID Price Prediction) shares rallied into the summer as it moved from below $3 in mid-July to $8 by the end of the month. In the last month, they have collapsed 23% and are now down 53% for the year. Clearly, Wall St. sees what was once a troubled company as deeply troubled.
Investors disliked second-quarter earnings and winced when new CEO Silvio Napoli said he had started an “operational reset.” He said current models were not enough to take the company forward and that it needed new products. He said he planned to cut expenses by another $1 billion. He said that the company’s new Cosmos, priced below $50,000, would be delayed until next year. And he chopped 1,500 people. This is after layoffs several months ago.
Napoli’s list of plans may have been too long to be believable. The company will use Nuro’s self-driving software to partner with Uber (NYSE: UBER). It will be built on the all-electric Gravity SUV. The announcement of the deal was nothing short of breathless: “Setting a new standard for safe, sustainable, and scalable autonomous transportation worldwide with a next-generation global robotaxi program. This is a first-of-its-kind partnership built on expertise, collaboration, and trust,” the companies said.
The reason for the panic is simple. Lucid continues to lose money and makes very few vehicles. It has cut costs, a move that is as old as the mountains. And it is unclear how much was fat and how much was muscle.
The sub-$50,000 EV is a product most EV companies know they need to restart slow EV sales. That means competition. And the self-driving taxi business is full to overflowing. That includes Tesla (NASDAQ: TSLA) and Waymo, who have access to huge amounts of capital and have been in the field for months, if not years.
Lucid is chasing business where it is not close to the first company in line. And, well behind others, it does not have the money to catch up.
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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.
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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.
