An EV blog reported Lucid was weighing Chapter 11 or going private on the advice of AlixPartners — Lucid called the claims false
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Lucid $LCID stock tumbled by as much as 40% on Tuesday, then clawed back a portion of those losses to end the session down 16%, following the publication of a report by an electric vehicle blog alleging the company was exploring bankruptcy or a move to go private. Lucid called the report false.
The report, from a site called EV, cited two unnamed sources who said consulting firm AlixPartners had recommended Lucid's board consider either Chapter 11 bankruptcy protection or a privatization, according to TechCrunch. The site also reported that AlixPartners had advised further restructuring in the U.S. and Europe and a sharper focus on the Gravity SUV.
Lucid chief communications officer Nick Twork told TechCrunch the claims were "completely false." "The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today," Twork said in a statement. "AlixPartners is assisting us in that and nothing else and has not recommended bankruptcy to management or the Board." AlixPartners declined to comment.
Regulators paused trading in Lucid shares on several occasions throughout the session due to excessive price swings. The stock swung between $5.76 and $2.37 on Tuesday before closing at $4.62. Lucid stock was down an additional 4.1% in premarket trading Wednesday.
As of the end of March, Lucid's total available liquidity stood at approximately $3.2 billion, with around $2.5 billion of that consisting of debt capacity it had yet to draw on, according to Barron's, citing Cantor Fitzgerald analyst Andres Sheppard. The company then secured another $1 billion in April, a sum that included a $200 million check from Uber $UBER. Sheppard wrote that the company was "funded well into next year."
The stock drop came amid a difficult period for the luxury EV maker. Lucid announced plans to cut approximately 18% of its U.S. workforce earlier this month as new CEO Silvio Napoli works to reduce costs, the second major round of cuts this year. The company also eliminated a second production shift at its Arizona factory and did away with the chief operating officer role entirely.
Lucid's second-quarter deliveries came in at 3,953 vehicles, a figure barely ahead of what the company achieved in the comparable quarter of the prior year. In May, Lucid pulled its full-year production outlook, with Napoli citing a need to reassess strategic priorities and work down a backlog of vehicles sitting unsold. Lucid is scheduled to report second-quarter earnings on Aug. 4.
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