Lucid Stock Collapses On Heavy Volume
Shares of Lucid Motors (NASDAQ: LCID) have plummeted 24% over the past five trading days, trading just above $2. On Friday, trading volume reached 135 million shares. Investment bank Redburn-Atlantic downgraded Lucid's price target to $1.13, citing competition and production scalability issues. Lucid reported a revenue increase to $807 million for 2024 but a net loss of $2.7 billion. Additionally, the company unexpectedly replaced CEO Peter Rawlinson with COO Marc Winterhoff temporarily, raising concerns among investors.
Shares of EV company Lucid Motors (NASDAQ: LCID) have collapsed 24% in the last five trading days. The stock trades just above $2. On Friday, volume hit 135 million shares, making it the fourth most actively traded stock of the day.
The tiny EV company had a week of bad news. Investment bank Redburn-Atlantic hit Lucid with a price target drop to $1.13, giving it a “sell” rating. The bank said whatever tech advantage Lucid has in the sector will soon be matched by its competition. The analysts also said Lucid could not scale up production if demand rises.
Production capacity is not a problem now and may never be. Lucid produced only 3,099 vehicles in the fourth quarter of last year. It said it would double annual production in 2025, but there is no evidence of that. It cannot show that there will be a demand for them, even if the production scale rises.
Lucid had another year of brutal losses. Revenue hit $807 million for 2024, up from $595 million in 2023. Its net loss was $2.7 billion compared to $2.8 billion in 2023.
Finally, Lucid made a shocking announcement that falls into the category of those no investor wants to see. It unexpectedly dumped long-time CEO Peter Rawlinson and put Marc Winterhoff, the Chief Operating Officer, in his place, but only temporarily. The board will take its time finding a permanent leader.
The $1.13 price target from Redburn-Atlantic makes sense, but setting the number at zero may be a better target.
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