Lucid Group: Sharp Price Losses Following Capital Increase and Disappointing Quarterly Report

The shares of Lucid Group fell by more than 15 percent on Thursday after the company announced a large capital increase involving 262 million shares and reported significantly higher losses for the third quarter than expected. Investors are concerned about the impending dilution: the move is expected to raise $1.7 billion to secure the company's liquidity. The largest shareholder, the Saudi Arabian sovereign wealth fund, plans to defend its dominant stake by purchasing 375 million shares, but this cannot dispel market uncertainty. Lucid is burning through increasing amounts of cash. Despite having a reserve of four billion dollars, the company plans to consume 2.3 billion within the next 18 months, which would exhaust the reserve by the end of 2025. Undertaking such a bold move carries significant risks. To make matters worse, losses in the third quarter exceeded expectations by significantly amounting to over 765 million dollars, pushing Lucid's profitability further out of reach. This comes at a time when the electric vehicle market is cooling. Competitors like Tesla are cutting their prices, which makes survival more challenging for Lucid, even after achieving a record of 2,781 deliveries in the third quarter. The stock price has already dropped by 30 percent this year, and without a clear turnaround, investors are questioning whether this latest capital raise will suffice to revive demand and ensure competitiveness.