Lucid Stock Collapses On Heavy Volume

By Douglas A. McIntyre Published Mar 1, 8:56AM EST

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Lucid Stock Collapses On Heavy Volume — © Lucid Air Pure GIMS 2024 1X7A2255 (BY-SA 4.0) by Alexander-93

Shares of EV company Lucid Motors (NASDAQ: LCID | LCID Price Prediction) 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.

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.