Insights

Why Lucid Shares Dropped by Double Digits Today

What happened
The Nasdaq Composite Index is leading the market down again today, reflecting carnage in the growth and technology sector. But electric vehicle (EV) stocks like Lucid Group (NASDAQ: LCID) are significantly further to the downside. Lucid shares are extending a 31% five-day drop today with a decline of 12.6% as of 3:08 p.m. ET.
So what
Lucid released its first-quarter report last week, and shares are now down 31% since that report. The results didn’t show any big surprises that would lead investors to bail out of the stock. But the status quo isn’t quite enough right now as the market revalues many fast-growing young companies in the EV sector.
The Lucid Air EV. Image source: Lucid Group.

That seems to be what is happening with Lucid as it still sits with a market cap of $23 billion. That doesn’t quite jibe for investors right now with first-quarter revenue of just $57.7 million. 

Now what
Nothing has changed with Lucid recently, though. The change is what valuation investors are willing to give to a higher-risk start-up like Lucid. 
The company kept its 2022 production guidance in place when it reported last week. And its more than 30,000 vehicle reservations would bring in revenue of nearly $3 billion if they become finalized sales. 
Prior to this correction, Lucid was trading on its potential. But now, investors aren’t willing to give it, or many other EV makers, the benefit of the doubt. Until those sales become a reality, it’s unlikely that Lucid shares will soar again. That shouldn’t bother long-term investors, though, as a long time horizon was always the plan.
Howard Smith has positions in Lucid Group, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

The Nasdaq Composite Index is leading the market down again today, reflecting carnage in the growth and technology sector. But electric vehicle (EV) stocks like Lucid Group (NASDAQ: LCID) are significantly further to the downside. Lucid shares are extending a 31% five-day drop today with a decline of 12.6% as of 3:08 p.m. ET.

So what

Lucid released its first-quarter report last week, and shares are now down 31% since that report. The results didn’t show any big surprises that would lead investors to bail out of the stock. But the status quo isn’t quite enough right now as the market revalues many fast-growing young companies in the EV sector.

The Lucid Air EV. Image source: Lucid Group.

That seems to be what is happening with Lucid as it still sits with a market cap of $23 billion. That doesn’t quite jibe for investors right now with first-quarter revenue of just $57.7 million. 

Now what

Nothing has changed with Lucid recently, though. The change is what valuation investors are willing to give to a higher-risk start-up like Lucid. 

The company kept its 2022 production guidance in place when it reported last week. And its more than 30,000 vehicle reservations would bring in revenue of nearly $3 billion if they become finalized sales. 

Prior to this correction, Lucid was trading on its potential. But now, investors aren’t willing to give it, or many other EV makers, the benefit of the doubt. Until those sales become a reality, it’s unlikely that Lucid shares will soar again. That shouldn’t bother long-term investors, though, as a long time horizon was always the plan.

Howard Smith has positions in Lucid Group, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!