Lucid Shares Pare Steep Losses After Denying Bankruptcy Rumors

Lucid Group Inc. shares recovered from a steep plunge on Tuesday after the electric vehicle maker forcefully denied rumors that it was considering a bankruptcy filing. The stock, which had fallen by as much as 55%, pared losses significantly after the company clarified its relationship with a restructuring adviser.

Market Turmoil Follows Report

The sell-off was triggered by a report from electric-vehicles.com, later echoed by other outlets, stating that Lucid was evaluating restructuring options. The report, which prompted multiple volatility-related trading halts, claimed that strategic options under consideration included filing for Chapter 11 bankruptcy protection or being taken private by its largest shareholder.

The market's reaction was swift and severe, with Lucid's stock price more than halving at its session low before the company issued its response.

Lucid Rebuffs Bankruptcy Claims

In an emailed statement to Bloomberg, Lucid called the bankruptcy rumors "completely false." The company did confirm, however, that it is working with restructuring advisory firm AlixPartners.

Ad

Lucid stated that AlixPartners is only "assisting in improving execution" and has not recommended bankruptcy. Following the company's denial, the stock rebounded sharply, though it remained down roughly 20% on the day.

Context and Financial Scrutiny

The incident places a spotlight on the financial position of the luxury EV maker as it works to cut costs and prepare for the launch of a new mid-size vehicle. The company has previously stated it has sufficient cash to operate into the second half of next year, bolstered by financial support from its majority owner, Saudi Arabia’s Public Investment Fund.

The market jitters briefly spread to peers in the EV sector. Shares of competitor Rivian Automotive Inc. fell approximately 3% following the initial report.