Lucid Group Inc (NASDAQ:LCID) shares are cratering Tuesday after a report claimed the electric vehicle maker is weighing options that include going private or filing for bankruptcy protection. The stock was recovering some losses at last check after the company said the report was false. Here’s what you need to know.
- Lucid Group stock is among today’s notable decliners. Why is LCID stock down today?
Bankruptcy and Take-Private Among Options Reportedly on the Table
According to a report from Electic-Vehicles.com, Lucid is considering going private or filing for Chapter 11. The report indicates that restructuring firm AlixPartners has been brought in to advise Lucid’s board and is expected to deliver its findings before the board’s next meeting, citing people familiar with the matter.
A spokesperson for Lucid told Benzinga “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,” a Lucid spokesperson said.
The report that sent shares of Lucid tumbling says the adviser is also recommending the company run another round of restructuring in the United States and Europe while narrowing its focus to the Gravity SUV and pausing expansion into additional European markets where quality problems have made the vehicles difficult to sell.
LCID Shares Are Plummeting
LCID Price Action: Lucid shares were down more than 40% on the report before bouncing back. The stock was down 20.51% at $4.37 at the time of publication on Tuesday. Lucid stock is trading at a new 52-week low, according to Benzinga Pro.
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