LCID - Why Lucid Stock Slumped in March and Continues to Fall
2024-04-08 13:26:35 ET
Lucid Group (NASDAQ: LCID) is among the several electric vehicle (EV) start-ups that have been compelled to cut prices of their cars and accept dwindling margins because of a global slowdown in demand growth for EVs. The timing couldn't be any worse for Lucid, which was already struggling with production and sales. Understandably, that has been reflected in its share price -- the electric car stock lost 13.6% in March alone and is now down almost 38% this year, according to data provided by S&P Global Market Intelligence .
Ironically, in March, investors were reminded of a solid advantage Lucid has over its peers -- the backing of the government of Saudi Arabia. Even so, there's a reason why the EV stock still fell last month and is already down another 6.5% in April.
Last month, Lucid struck an agreement with an affiliate of Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), to raise funding of $1 billion. That affiliate, Ayar Third Investment Company, will buy $1 billion in convertible preferred stock.
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Why Lucid Stock Slumped in March and Continues to Fall