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Lucid reassures investors after Nasdaq halts on bankruptcy rumors
The company said it is working with restructuring firm AlixPartners to improve execution and operations, and stated it has sufficient liquidity to fund operations into next year.
Lucid moved to quell bankruptcy speculation after Nasdaq halted trading, following a rumor that the electric-vehicle maker was working with restructuring expert AlixPartners. According to coverage cited by Yahoo Finance, Lucid told Bloomberg it was not preparing for bankruptcy and that AlixPartners’ role is focused on improving execution and operations.
Even as the stock recovered some of the losses, Lucid ended the day down more than 10%, per the report. The article links the selloff to investor concern over the company’s finances, including a weaker cash position versus a year earlier.
At the end of the first quarter, Lucid held roughly $700 million in cash, with no short-term investments, after having about $1 billion in cash a year earlier and more than $600 million in short-term investments. The same quarter showed about $2 billion in long-term debt and roughly $500 million in other long-term liabilities, and the company spent $630 million in research and development, plus selling, general, and administrative costs.
The report also highlights that Lucid generated $282 million in revenue from car sales while spending nearly $600 million to build them, underscoring the profitability pressure investors are watching. Yahoo Finance characterizes the situation as another indicator of elevated risk, even though it notes that AlixPartners may provide support beyond bankruptcy services.
Latest closeNasdaq Comp. 26,269.23 ▲0.6%