Lucid Denies Take-Private, Bankruptcy Rumors After Shares Plunge Over 50%

Lucid Group (LCID) on Tuesday forcefully denied a blog post's claims that it was considering a take-private transaction or a Chapter 11 bankruptcy filing. The company's statement came after the report triggered a massive sell-off, causing shares to plummet by more than 50% in their worst single-day performance on record.

Market Mayhem

The report, published on the Eletric-Vehicles blog, prompted a dramatic investor reaction. Trading in Lucid's stock was halted multiple times after 1 p.m. ET due to the intense volatility.

At its lowest point, the stock fell as much as 57% to $2.37 before partially recovering. The shares pared some of the extreme losses after the company issued its denial, but remained significantly lower on the day.

Lucid's Rebuttal

In its response, Lucid labeled the blog post's assertions as "completely false." The company provided several key points to reassure investors:

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• It has sufficient liquidity to fund operations "well into the next year."
• No special board committee has been formed to explore a take-private deal or bankruptcy.
• Restructuring adviser AlixPartners is assisting with improving execution and operations, not recommending bankruptcy.

The original report had claimed AlixPartners was preparing to present these scenarios to Lucid's board. AlixPartners did not immediately respond to a request for comment, according to Reuters.

Context for Investors

The market's severe reaction highlights ongoing investor anxiety surrounding Lucid, whose shares have lost approximately 99% of their value since its market debut. The company has been grappling with persistent cash burn, weak demand, and production challenges despite billions in financial backing from Saudi Arabia’s Public Investment Fund.

This incident occurs as Lucid undergoes a major restructuring under CEO Silvio Napoli, who took the helm in June. Last month, the company announced it would cut 18% of its U.S. workforce and streamline its leadership. In May, Lucid suspended its 2026 production forecast for its Gravity SUV, citing supplier issues, and has yet to provide updated guidance.