24/7 Wall St. Insights
- Lucid Group Inc. (NASDAQ: LCID) has been a penny stock for almost two years.
- The stock has underperformed the broader market in that time.
- Also: Dividend legends to hold forever.
Lucid Group Inc. (NASDAQ: LCID) has been a penny stock (under $5) for almost two years, and it should never have traded above that. The stock of the deeply troubled electric vehicle (EV) company was down approximately 10% this year, while the S&P 500 was 18% higher. The share price is 77% lower in the past two years, while the S&P 500 is up 45%.
Lucid has been unable to escape the fact that it is a tiny player in an industry whose growth has unexpectedly slowed. It delivered only 2,394 vehicles in the second quarter and expects to do no more than 9,000 this year. It has revenue of only $200 million and a loss of $643 million, which adds to a long string of quarters with red ink.
In an era when the race is to produce a $25,000 EV to lift the industry from its doldrums, Lucid’s cars cost $80,000. They have unspectacular ranges of less than 400 miles on a single charge. An investment of $1.5 billion from the Public Investment Fund of Saudi Arabia is not enough to sustain it.
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