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Lucid stock to be kicked off Nasdaq 100; Will LCID crash?

Lucid stock to be kicked off Nasdaq 100; Will LCID crash?

The electric vehicle (EV) maker Lucid (NASDAQ: LCID) has been dealing with a veritable deluge of bad news throughout 2023. As a result, the company’s stock is down 23.34% since January 1 and 52.17% in the red compared to its price at the time of its initial public offering (IPO).

The EV maker received yet another hit on Friday, December 8, when Nasdaq announced that it is removing Lucid, along with six other companies, from its Nasdaq 100 index, which tracks the 100 largest non-financial companies listed on the marketplace.

Removal from the index tends to have a major short-term impact on affected stocks as it can turn investor sentiment sour and can cause selling pressure as the funds tracking the index are forced to offload the relevant shares. It also leads to an overall decrease in visibility for the removed shares.

Still, the news does not guarantee that Lucid is entering its death spiral as multiple companies have successfully recovered from being removed from the index, with the most notable example coming in the form of one of LCID’s biggest competitors – Tesla (NASDAQ: TSLA).

The winners and losers of Nasdaq 100 2023 annual restructuring

In total, Nasdaq announced that six companies will be losing their spot on its prestigious index while six new ones will be added. Along with Lucid, the list of departures includes Align Technology, Inc. (Nasdaq: ALGN), eBay Inc. (Nasdaq: EBAY), Enphase Energy, Inc. (Nasdaq: ENPH), JD.com, Inc. (Nasdaq: JD), and Zoom Video Communications, Inc. (Nasdaq: ZM).

On the flip side, the Nasdaq 100 is adding CDW Corporation (Nasdaq: CDW), Coca-Cola Europacific Partners plc (Nasdaq: CCEP), DoorDash, Inc. (Nasdaq: DASH), MongoDB, Inc. (Nasdaq: MDB), Roper Technologies, Inc. (Nasdaq: ROP), and Splunk Inc. (Nasdaq: SPLK).

The changes are to become effective before the market opens on Monday, December 18, 2023.

A troublesome year for Lucid

Lucid has been having a rather bad year throughout 2023. It has faced significant pressure due to an overall slowdown in demand for EVs, and the pressure has been further compounded by what is largely considered a price war within the industry – a price war that major companies like Tesla appear to be winning.

As part of its efforts to recover from the turmoil, Lucid instituted an ambitious cashback program on the purchase of its vehicles. Despite such efforts, the company has been posting increasingly disappointing quarterly reports and has repeatedly downsized its delivery expectations for the year.

The combined news caused many investors to wonder whether the EV maker has a future. Despite the setback, the company is still not out of the picture and has experienced some recovery as part of the ongoing technology sector stock market rally.

LCID price analysis

Lucid’s most recent performance on the market provides some room for optimism. In the last 30 days, the price of its shares rose 19.14%. A significant rally has also been evident in its performance over the last 7 days, as LCID is 9.74% in the green.

LCID YTD price chart. Source: Finbold

Still, both its long-term and short-term performance demonstrates an overwhelmingly bearish sentiment. Despite the monthly recovery, the company’s stock is down 23.34% year-to-date. 

Finally, while LCID did close 5.58% in the green at the price of $4.73, it is more than 5% in the red in Monday’s pre-market – likely as a direct result of the removal from the Nasdaq 100 index.

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