Lucid Stock Dives Amid Reverse Stock Split Vote: Buy or Sell?

Lucid's stock is down 8.1% as the company submits a filing for a 10-for-1 reverse stock split. Despite the negative valuation pressures, the stock is still up 21% over the last month. The company's operations are supported by funding from Saudi Arabia's Public Investment Fund, and while it's still a risky investment, Lucid has a chance of growing its operations and delivering huge returns for investors with high risk tolerance.

Lucid Group's (NASDAQ: LCID) stock is down 8.1% as of noon ET, following the company's submission of a filing to the Securities and Exchange Commission (SEC) for a 10-for-1 reverse stock split. The move comes after a period of significant price volatility, with the stock surging earlier this month due to a partnership with Uber Technologies. Despite the recent pullback, Lucid's stock is still up 21% over the last month, though it remains down 15% year-to-date.

The reverse stock split, which will take place on Aug. 18, aims to increase the share price and potentially attract more institutional investors. This move is often used by companies to meet listing requirements or improve the perception of their stock. However, it can also create negative valuation pressures, as seen in today's market reaction.

Lucid's operations are currently supported by funding from Saudi Arabia's Public Investment Fund (PIF), which has been a significant backer for the company. The company continues to post large losses per vehicle sold but has seen some positive developments, such as the recent launch of the Gravity SUV, which has been well-received by customers. While Lucid is still a long way from achieving profitability, the company has an outside chance of delivering significant returns for investors with a high risk tolerance.

The Motley Fool's Stock Advisor team has not included Lucid Group in their list of top 10 stocks to buy now, citing the company's high risk profile. However, investors with a high risk tolerance may want to consider Lucid as a potential turnaround option, given the company's recent sales growth and the support from the PIF.

Lucid Group is set to release its second-quarter 2025 results on Aug. 5, after market close. The Zacks Consensus Estimate for the quarter is pegged at a loss of 22 cents per share on revenues of $253.4 million, indicating a year-over-year improvement of 24%. The company's recent sales growth and positive customer reception of its new models suggest that Lucid may have the potential to beat earnings expectations.

In conclusion, Lucid Group's stock is facing significant challenges, but the company has shown signs of growth and has a chance of delivering substantial returns for investors with a high risk tolerance. The upcoming reverse stock split and earnings report will provide further insights into the company's prospects.

References:
[1] https://finance.yahoo.com/news/lucid-sinking-today-stock-buy-161814571.html
[2] https://www.nasdaq.com/articles/why-lucid-group-stock-sinking-today-1
[3] https://www.investors.com/news/lucid-stock-a-buy-lcid/
[4] https://www.nasdaq.com/articles/can-lucid-pull-beat-earnings-season-things-note