Things aren’t looking good for Lucid Motors.
Shares rose as high as $648.60 in the post-covid electric car mania but are now trading at just $4.54 and are down 17% today. They fell 55% at the lows today on a report from electric-vehicles.com that said it was working with restructuring adviser AlixPartners, who had been asked to deliver a report to the board before its next meeting.
The strategic options under review include taking the Saudi-backed EV maker private or filing for Chapter 11 bankruptcy protection, one of the sources said
The company has been facing quality issures and the report said AlixPartners is urging the board to run one more round of restructuring in the United States and Europe, and to narrow the company’s focus onto its Gravity SUV.
The company released this statement to Yahoo, which raises as many questions as answers:
“The rumors are 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. Our focus is on improving execution, strengthening operations, and positioning Lucid to realize the full potential of its technology, products, and innovation. AlixPartners is assisting us in that and nothing else and has not recommended bankruptcy to management or the Board. We undertake no duty to update our comments on this matter.”
The last line is the real kicker. That is boilerplate lifted from forward-looking-statements disclaimers in filings — but you almost never see it bolted onto a rumor denial. it was very likely added by lawyers who are preserving the ability for this statement to be true today and stale tomorrow without liability.
The part about a special committee is also an odd one as the original report never said it had formed a special committee, only one that would report at the next regular meeting.
Here is the intraday stock move.
This article was written by Adam Button at investinglive.com.