Dive Brief:
- Lucid Group has filed a proxy statement with the Securities and Exchange Commission to initiate a 1-for-10 reverse stock split of its Class A common stock, the company announced in a July 17 press release.
- The electric automaker believes that the move will help make its stock more attractive to a broader group of investors and other market participants, which may help the company raise much-needed capital as it looks to compete with more established automakers in the competitive electric vehicle segment.
- The reverse stock split will be put to a vote at a special shareholders meeting for approval. The company says it will file and distribute a definitive proxy statement regarding the meeting and its proposal, but the date was not disclosed in the release.
Dive Insight:
Public companies typically initiate a reverse stock split to boost their share price. When the proposal was made public on July 17, Lucid’s stock price soared nearly 34% in the following days.
But despite the sudden jump in its stock price on the announcement, Lucid has been struggling financially. The company’s 52-week high stock price reached $4.43, but fell to $2.03 on July 1 after the company announced its Q2 production and delivery totals.
It's a stark contrast from November 2021 when shares of the company topped $55. Lucid’s stock steadily lost value since as it works to ramp up production of the Air sedan and Gravity SUV and grow its sales in a competitive global electric vehicle market.
The automaker produced 6,075 vehicles in the first six months of 2025 and delivered 6,418. The automaker said it expects to build approximately 20,000 vehicles in 2025.
On May 6, Lucid reported Q1 revenue of $235 million on deliveries of 3,109 vehicles. The company is scheduled to announce its Q2 earnings on Aug. 5.
Lucid previously announced two significant investments in 2024 to raise capital.
In October 2024, Lucid announced a capital raise of approximately $1.67 billion through a combination of a public offering and a private placement with an affiliate of the Public Investment Fund of Saudi Arabia, which holds a majority stake in the company. It followed a $1 billion investment from a PIF affiliate in March 2024.
Lucid ended the first quarter of 2025 with approximately $5.76 billion in total liquidity, according to its earnings report.
Unlike Lucid, Tesla executed a 5-for-1 forward stock split in August 2020 and another 3-for-1 forward split in August 2022 as its share price soared over the years and helped it become the world’s most valuable automaker. The forward split was intended to lower Tesla’s stock price to make it accessible to more investors. In August 2022 before the second forward split was completed, Tesla stock was valued around $300 a share.
The completion of Lucid’s proposed reverse stock split is subject to market and other customary conditions.
