Why Lucid (LCID) Stock Is Nosediving

What Happened?

Shares of luxury electric car manufacturer Lucid (NASDAQ:LCID) fell 8% in the morning session after negative investor sentiment persisted following the company's recent 10-for-1 reverse stock split. 

The decline is a continuation of the previous day's slide, which began after the split took effect. A reverse stock split consolidates the number of existing shares to increase the per-share price, a move that traders and the market often view as a sign of weakness or an attempt to avoid delisting from a major stock exchange. 

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Lucid? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Lucid’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was about 22 hours ago when the stock dropped 3.5% on the news that investor sentiment remains negative following the company's recent 1-for-10 reverse stock split. 

Lucid is down 49.1% since the beginning of the year, and at $15.44 per share, it is trading 61.2% below its 52-week high of $39.80 from September 2024. Investors who bought $1,000 worth of Lucid’s shares at the IPO in September 2020 would now be looking at an investment worth $156.07.

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