What Happened?
Shares of luxury electric car manufacturer Lucid (NASDAQ: LCID) fell 3.5% in the afternoon session after investor sentiment remains negative following the company's recent 1-for-10 reverse stock split. The decline extends from the previous trading day, when the stock hit an all-time low after the split took effect. A reverse stock split consolidates the number of existing shares to increase the per-share price, a move traders sometimes view as a sign of weakness. Broader industry headwinds also loom, as reports suggest the potential end of federal EV tax credits later in September could negatively impact sales across the sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Lucid? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Lucid’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 10.1% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Lucid is down 44% since the beginning of the year, and at $16.96 per share, it is trading 57.4% below its 52-week high of $39.80 from September 2024. Investors who bought $1,000 worth of Lucid’s shares at the IPO in September 2020 would now be looking at an investment worth $171.49.
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