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Bankruptcy Rumors Denied
Lucid Motors moved to quash reports it was weighing bankruptcy or a buyout after its stock plunged Tuesday, with Nick Twork telling TechCrunch that the “rumors are completely false.”
““rumors are completely false.””
Twork said the company has “sufficient liquidity to carry its operations well into next year” and that it “has not formed any special Board committee to explore the scenarios reported today.”
The denials came after an electric-vehicle blog reported Lucid was considering “Chapter 11 bankruptcy protection” or going private on the recommendation of AlixPartners, according to TechCrunch.
Shares were described as having sunk more than 50% on Tuesday, and TechCrunch said the stock was trading at $4.72 a share as of 2:46 p.m. ET after recovering from the free fall.
TechCrunch also said Lucid recently named a new CEO and laid off more than 2,000 employees this year as part of a sweeping restructuring ahead of the expected launch of its smaller, more affordable electric SUV later this year.
Stock Volatility and Halts
InsideEVs reported that Lucid issued a strong denial on Tuesday after a report sent its stock into free fall, with the shares falling nearly 56% over the course of an hour and triggering two volatility trading halts.
Twork’s statement to InsideEVs said the company has “sufficient liquidity to carry its operations well into next year” and that it “has not formed any special Board committee to explore the scenarios reported today.”
InsideEVs said the report cited two unnamed sources and claimed AlixPartners was tasked with advising Lucid’s board on whether to “seek Chapter 11 protection” or be taken private.
Forbes said the stock was halted multiple times for volatility, collapsing to a low of $2.37 per share before recovering to $4.68 by 3:30 p.m. EDT, still down around 15% on the day.
Forbes also reported that Twork told the outlet the company has “sufficient liquidity” and “has not formed any special Board committee,” while AlixPartners was helping Lucid with “improving execution, strengthening operations, and positioning Lucid” and “has not recommended bankruptcy at this time.”
Restructuring, Production, Robotaxi
Beyond the denial, the sources tied the turmoil to Lucid’s restructuring and production plans, with TechCrunch saying Lucid delivered 3,953 vehicles in the second quarter and that it would eliminate a second production shift at its Arizona factory as it aligns “production plans with anticipated demand.”
“aligns “production plans with anticipated demand.””
TechCrunch also said Lucid is trying to get a luxury robotaxi service off the ground by the end of this year with partners Uber and Nuro, with Uber committed to buying at least 35,000 Lucid vehicles over the next few years.
The CNBC account said Lucid’s statement included that “AlixPartners is assisting us in that and nothing else and has not recommended bankruptcy to management or the Board,” while also noting the stock recovered from intraday losses and closed the day 16% lower at $4.62 a share.
CNBC reported that Lucid has been facing a challenging market and said it laid off 18% of its U.S. workforce as part of a cost-savings plan, after a new CEO announced a shake-up to “simplify the company’s structure.”
In the same CNBC reporting, Lucid was described as having suspended its production guidance in May while Napoli evaluated business decisions and said the company needs to lower its “elevated inventory” of vehicles.