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Lucid Stock Plummets on Report It's Weighing Bankruptcy, Going Private
Shares of Lucid Group Inc. (LCID) plunged as much as 46% in midday trading Tuesday, triggering two volatility halts, after a report claimed the electric vehicle maker is weighing significant strategic options, including a potential bankruptcy filing.
Restructuring Options Weighed
The sell-off was prompted by a report from electric-vehicles.com, which stated that Lucid has engaged restructuring adviser AlixPartners to evaluate its path forward. According to the report, the adviser has been asked to present its findings to Lucid's board before its next meeting.
The strategic scenarios reportedly under consideration include:
- Taking the company private.
- Filing for Chapter 11 bankruptcy protection.
AdThe report stressed that these are scenarios being evaluated by the adviser and do not represent a decision made by Lucid's board. AlixPartners is also said to be recommending another round of restructuring in the U.S. and Europe, with a renewed focus on the company's Gravity SUV.
Market Context
Speculation about a potential take-private transaction, led by its primary financial backer, Saudi Arabia's Public Investment Fund, has surrounded Lucid for months. However, the company's previous management stated last year that it was unaware of any such plans.
The report also noted that Lucid's second vehicle, the Gravity SUV, has encountered quality issues since limited production began in late 2024. The sharp decline in share price reflects significant investor concern over the company's financial stability and operational challenges in a competitive EV market.
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