Lucid Group, the maker of the luxury Air electric sedan, has firmly rejected a report suggesting it might be heading toward bankruptcy or a buyout, after the claim triggered a dramatic sell-off in its shares.
The report, published by an industry blog, cited unnamed sources as saying the restructuring firm AlixPartners had been asked to lay out options for Lucid's board, including a possible take-private deal or a Chapter 11 filing. Lucid disputed that account sharply. "The rumors are completely false," the company's communications chief, Nick Twork, said in a statement reported by TechCrunch, adding that AlixPartners "has not recommended bankruptcy to management or the board."
A steep sell-off
The report nonetheless rattled investors. Lucid's Nasdaq-listed stock fell sharply during the session, dropping by roughly 40 to 50 percent at its worst and triggering volatility halts before recovering some ground. It was among the steepest single-day declines the company has seen.
Lucid said it retained enough cash to fund its operations well into next year and that it had not set up any special committee to weigh the scenarios described in the report. AlixPartners, it said, had been brought in to help improve operations, not to steer the company toward insolvency.
Pressure on an EV upstart
Even with its denial, the episode underscored how fragile confidence in Lucid has become. The company, whose largest backer is Saudi Arabia's sovereign wealth fund, the Public Investment Fund, has burned through cash as it tries to ramp up production and build demand for its vehicles. Its shares trade far below their early highs, and it has cut jobs and reshuffled leadership over the past year.
The broader market for electric vehicles has also turned more difficult, with softening demand and intense competition from both established automakers and other startups. Against that backdrop, investors proved quick to sell first and ask questions later: the violence of the reaction to an unverified report suggested how little cushion Lucid's stock now has, regardless of the company's insistence that its finances are sound.
