Lucid Stock Plummets 57% After Hiring Restructuring Consultants Amid Financial Concerns
Electric vehicle manufacturer Lucid experienced a historic one-day stock drop of up to 57% on Wall Street, marking the steepest intraday decline ever recorded for the company. The plunge followed reports that Lucid had engaged AlixPartners, a consulting firm specializing in corporate turnarounds, to review its operations as part of a broad efficiency plan. The initiative aims to streamline operations, reduce costs, and ensure the successful launch of a new mid-size vehicle model, a crucial segment for expanding Lucid's customer base and sales volume.
In response to the market turmoil, Lucid issued a statement denying rumors that it was considering filing for bankruptcy protection. The company emphasized it holds sufficient liquidity to continue operations through the next year and clarified that AlixPartners' role is limited to operational improvements, with no recommendations made to file for bankruptcy. Despite these reassurances, investor panic led to multiple trading halts due to extreme volatility, though the stock partially recovered later in the day.
Lucid has faced significant challenges recently, including lowering production forecasts, initiating a comprehensive business review, and announcing large-scale layoffs. New CEO Silvio Napoli has been restructuring the management team, eliminating the chief operating officer role and appointing a new chief financial officer. Once hailed for its luxury Air sedan, Lucid has struggled to grow sales and reduce losses in recent years. The company heavily relies on financial backing from Saudi Arabia's Public Investment Fund, its largest shareholder, which has funded its operations and new model development.
Additionally, reports surfaced suggesting that strategic options under consideration included delisting from the stock exchange or filing for Chapter 11 bankruptcy protection in the U.S. Lucid categorically denied these claims, labeling them as completely false rumors.
