Key Points

• Lucid (Nasdaq: LCID) has an overly expensive, unappealing vehicle line up
• Shareholders continue to get heavily diluted as the company searches for a path forward
• Financial tricks like a reverse stock split, and ongoing investment from the Saudi public investment fund won’t change this company’s fate
• While Lucid flounders, “The Next Nvidia” stocks are soaring. Click here to see why the smart money is lining up

Watch The Video

Read The Transcript

[00:00:00] Doug McIntyre: So our friend at Lucid, they, it’s EV company, two expensive EVs, don’t sell any EVs, right? I’m going to read you what they did. Okay. So they’ve, they’ve made a 262 million share public offering. And then their largest investors, Saudi Arabia’s, what’s known as AR third investment, the sovereign fund there, they bought 375 million shares.

[00:00:31] Doug McIntyre: You know, together they raised about 1. 7 billion. But this is really like, uh, just taking a dying horse and saying, we’re going to give it, you know, some red blood, red horse blood cells. I just do not understand it.

[00:00:51] Lee Jackson: You know, like you said, their biggest problem is the cars that they make are extremely high end.

[00:00:58] Lee Jackson: They don’t have the $25,000 sedan that, you know, Musk is cooking up right now. And you know, I heard some people saying, well, maybe they’re gonna do a reverse stock split. Like that’s who cares. Oh yeah. That’s gonna help. You know, like a one for 20 or something of that nature because what happens is the stock when I last looked was, you know, in the 3, you know, 2.

[00:01:25] Lee Jackson: 60 to 3 range. And at that level, you know, major Wall Street firms, you can’t margin stocks that are that cheap. And, um, I don’t know what they’re going to do, but I’ll tell you one thing. I think there’s a very good chance that they’re not this time next year. Game’s almost over.

[00:01:46] Doug McIntyre: Well, look, the Saudis are the de facto control group here, right?

[00:01:53] Doug McIntyre: I don’t know whether they exercise that or they don’t, but they own well over 50 percent of the company. I don’t know why they’re in it. I looked, if you said to me, GM was buying into it, at least I could say, I see the strategic thing there. It’s, you know, I, I get it there. These guys, maybe they have good software.

[00:02:14] Doug McIntyre: Maybe they’ve got good batteries. You know, at least there’s a rationale now what’s happened is, is that if I was a shareholder yesterday, I just got diluted unbelievably. while I was sleeping. All of a sudden I wake up the next day. I guess the good news for me is they’re not going out of business soon, but the bad news is I got deluded and they’re eventually going to go out of business.

[00:02:41] Lee Jackson: Yeah. It’s, it’s. Of all of the remaining, uh, figures in the eeny, meeny, evy world, as you like to say sometimes, it’s, it’s, it’s a jump ball on really who’s going to be the first to fall. Is it these guys? Is it Fisker? Is it our pals at Ribbion? I mean, they’re all in pretty dire financial straits, and there’s going to be a point when the Saudis, just like Volkswagen says, Nah, you know, we, we, we don’t need any more of this.

[00:03:13] Lee Jackson: If we want to have an EV, we’ll take a big, you know, chunk of Tesla (Nasdaq: TSLA).

[00:03:18] Doug McIntyre: Yeah. And now you’ve already said this, but I want to make sure that this is clear. The trend in the EV industry is to move towards a 25, 000 EV because right now. The median price of an EV, a new one in the United States is 55, 000. Gas powered car is 45, 000.

[00:03:38] Doug McIntyre: In China, they’re already building 15, 000 EVs. The U. S. is just blocking them from getting into the United States. They’ll never get in here. Terrible. They probably won’t because the people at Ford Motor Company (NYSE: F) have already said publicly, we’ll put them out of business. But what is the rationale for trying to market Listen, the lucid, once you like get the car and then you want like a cigarette lighter, you’re now talking about moving from 70 in the direction of a hundred thousand.

[00:04:08] Doug McIntyre: There is no market of any size to support this. And they lose so much money. They’ve got to be losing, Ford loses a hundred thousand dollars on every EV it sells. These guys have to be in that marketplace unless it’s worse. And there is no market for their cars. Well, and again,

[00:04:28] Lee Jackson: like you said, they’re expensive enough as it is.

[00:04:32] Lee Jackson: But when you get into the high end levels that the lucid vehicles are at. At a minimum of 75,000. Where’s the, where’s the demo for that? You have to go to the top 1% of all wage earners. And the thing is, you gotta remember, Doug, all of this started three, four years ago when, you know, the administration changed and all the EV quotas were were up because everybody was gonna go all in until everybody realized there’s no way to go all in and make money.

[00:05:03] Doug McIntyre: There’s not well, look, uh, well, they have earnings coming out. Uh, if my memory serves, I think in November seven, right after that, we will catch up and we will see how much money they’ve lost, what their burn rate is, and then we can actually make a forecast of when they’ll go out of business.

[00:05:22] Lee Jackson: Well, and again, I don’t think it’s out of the question that they’re thinking reverse split here.

[00:05:28] Lee Jackson: You know, it doesn’t matter.

[00:05:29] Doug McIntyre: As you know, at the market cap, I reverse split the stock. It does nothing. I know the valuation

[00:05:35] Lee Jackson: is the same as just the price will be higher. Yeah. Yeah.

[00:05:39] Doug McIntyre: Price will be like, yeah, that’ll, that’ll do really well. So yeah, November 7th after that, we’ll get together and, uh, we’ll tell people how bad it is.

[00:05:49] Doug McIntyre: Okay. I’ll put it on my calendar.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.