Lucid Group Inc (NASDAQ:LCID) shares are trading sharply lower Thursday, hitting a new all-time low, as traders keep circling back to dilution and execution worries even after Uber Technologies revealed major ownership interest that briefly improved sentiment.
- Lucid Group shares are approaching critical lows. Why is LCID stock at lows?
Why is Lucid Stock Dropping? Dilution Risks From $1.05B Financing Package
Lucid's stock continues its selloff just days after hitting a new all-time low on Monday. Despite major partnership announcements, the market remains highly focused on the risk of share dilution over future production potential.
The primary pressure point dragging down the stock is Lucid’s massive $1.05 billion financing package. Traders are treating the added share supply risk as a dominant near-term hurdle. This capital stack notably includes a $300 million underwritten public offering alongside $550 million from the PIF-affiliated Ayar Third Investment Company.
Uber's Robotaxi Deal, $500 Million Investment
The heavy dilution fears have largely neutralized the positive narrative surrounding Uber’s massive commitment to the automaker. An initial bounce following the Uber news quickly faded, even though Uber holds an 11.52% ownership stake and recently made an additional $200 million investment to bring its total commitment to $500 million. Beyond the capital, Uber also plans to purchase at least 35,000 Lucid vehicles for a global robotaxi platform.
The market is demanding concrete operational proof that Lucid can scale up production fast enough to fulfill the ambitious Uber deal and justify the fresh capital. This pressure to execute has only been amplified by a recent leadership shakeup, which installed Silvio Napoli as the new CEO alongside current COO Marc Winterhoff.
Critical Levels To Watch For LCID Stock
Lucid is still pinned near the bottom of its 52-week range, and the trend remains tilted lower after the stock set a fresh 52-week low in April. The stock is trading 27% below its 20-day simple moving average (SMA) and 39.6% below its 100-day SMA, a setup that leans toward sellers controlling both the short-term and intermediate trend.
The relative strength index (RSI), a momentum gauge, is 30.13, which is right on the doorstep of "oversold" conditions and can signal selling pressure is getting stretched. RSI at 30.13 reads like a market that's been leaning heavily on the sell button, even if bounces can appear quickly.
Over the past 12 months, the stock is down 73.33%, which matches the longer-running downtrend implied by the bearish moving-average stack. With the 20-day SMA below the 50-day SMA and the 50-day SMA below the 200-day SMA, rallies often need sustained follow-through before the longer-term picture starts to change.
- Key Resistance: $10.00 — a prior "line in the sand" area where rebounds have tended to stall.
- Key Support: $7.50 — a round-number zone where buyers often try to slow selloffs.
Lucid Group Earnings Preview For May
The countdown is on: Lucid Group is set to report earnings on May 5.
- EPS Estimate: $-2.21 (Down from $-2.00 YoY)
- Revenue Estimate: $396.83 million (Up from $235.05 million YoY)
- Valuation: N/A (P/E ratio not provided)
Analyst Consensus & Recent Actions: The stock carries a Hold Rating with an average price target of $13.33. Recent analyst moves include:
- TD Cowen: Hold (Lowers Target to $10.00) (April 15)
- Baird: Neutral (Lowers Target to $12.00) (April 15)
- Citigroup: Initiated with Buy (Target $17.00) (March 18)
LCID Stock Price Action Update
LCID Stock Price Activity: Lucid Group shares were down 8.54% at $6.32 at the time of publication on Thursday, according to Benzinga Pro data.
Image: Courtesy of Lucid
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