AInvest Newsletter
Daily stocks & crypto headlines, free to your inbox
Lucid Group's Cash Burn Intensifies, Short Squeeze Looms
ByAinvest
Monday, Jul 7, 2025 9:40 pm ET1min read
Lucid Group (LCID) has struggled in the stock market due to poor margins, high cash burn, and shareholder dilution. The company's stock has dropped over 90% since going public in mid-2021 and has underperformed the S&P 500. With high short interest and a risk of running out of cash, a short squeeze is a real possibility. As a result, the best long-term play is to sell Lucid.
Lucid Group (NASDAQ: LCID) experienced a mixed bag of news in the second quarter of 2025. The EV maker reported a strong jump in second-quarter deliveries, with 3,309 vehicles delivered, just shy of analysts' consensus of 3,611 units. This marks an improvement from the 2,394 vehicles delivered in Q2 2024 [1].However, the stock did not react positively to this news, with shares edging up about 1% in premarket trading despite the company's delivery momentum. The stock remains down more than 32% year to date, and short interest stands at roughly 12.6% of the float, underscoring lingering bearish bets [1].
The company's Q2 earnings are expected to be released on August 5, with analysts projecting an earnings per share (EPS) of -$0.24, representing a 17.24% increase compared to the same quarter last year. Revenue is expected to reach $292.12 million, up 45.64% year-over-year [3].
Investors are also watching for the impact of future funding rounds, which are expected to be announced in early to mid-2026. Past funding rounds have caused drops in share price between 15 and 30%, and there is concern that the upcoming funding round could lead to further dilution and a potential pullback in share price [2].
Lucid Group's struggles in the stock market are not surprising, given its poor margins, high cash burn, and shareholder dilution. The company's stock has dropped over 90% since going public in mid-2021 and has underperformed the S&P 500. With high short interest and a risk of running out of cash, a short squeeze is a real possibility. As a result, the best long-term play for investors may be to sell Lucid [3].
References:
[1] https://ca.finance.yahoo.com/news/why-lucid-group-stock-jumping-154931218.html
[2] https://www.reddit.com/r/LCID/comments/1lrjjxa/impact_of_future_funding_grounds_on_share_price/
[3] https://finance.yahoo.com/news/lucid-group-lcid-falls-more-221504293.html
Ainvest News articles are AI-generated using advanced large language model (LLM) technology designed to analyze and synthesize publicly available data and news. While AI tools assist in producing initial drafts and insights, all AI generated content published on Ainvest is subject to comprehensive human editorial review before publication. A designated human editor reviews, verifies, and approves each article for factual accuracy, coherence, and compliance with AInvest Fintech Inc’s editorial and disclosure standards.
Despite these review procedures, the information provided may still contain inaccuracies, incomplete data, or time sensitive references due to the inherent limitations of AI generated analysis and evolving changes. The material is provided strictly for informational and educational purposes and does not constitute personalized investment, legal, or financial advice. Readers should independently verify all facts, figures, and statements before making any decision based on this content.
AInvest Fintech Inc. its affiliates, and partners accept no liability or responsibility for any direct or consequential losses arising from reliance on this content. All articles and analyses are subject to revision, update, or removal without prior notice to maintain accuracy and integrity in our publications.
Comments
No comments yet