Lucid Motors (NASDAQ: LCID) has historically been quite a volatile stock. The luxury electric vehicle (EV) maker had its initial public offering (IPO) in 2021 — since then, despite strong backing from Saudi Arabia’s Public Investment Fund (PIF), LCID stock has struggled to move to the upside in a meaningful way without seeing a correction in short order.
The company failed to meet its H1 2024 delivery targets by 90% — in addition, the PIF’s significant investment, although nominally a tailwind, led to worries about share dilution — worries that were even echoed by the company’s CEO. Then, in Q3, the carmaker failed to meet production estimates.
Throughout 2024, the price of a Lucid share declined by 28%. However, the last month of the year proved to be a positive one — during that time, prices went up from $2.13 to $3.02. The 41.78% surge was caused primarily by the fact that the EV business announced on December 5 that production of its highly-anticipated Gravity SUV model had begun.
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However, the recovery proved to be short-lived — at the beginning of the week on January 13, the price of Lucid stock dipped below $3. At press time, a single Lucid share was changing hands at $2.96.
In tandem with this, short sellers began opening a bevy of new positions — with the short volume ratio of the stock crossing the threshold of 50 on Monday, per data retrieved by Finbold from Fintel on January 15.
Lucid stock attracts the interest of short sellers amid Wall Street’s bearish forecasts
On January 10, the short volume ratio for Lucid stock stood at 49.42. On January 13, the ratio had risen to 59.79 — and although it has since receded to 56.00, it remains high. Some 18.51% of the stock’s float has been sold short — indicating a strong level of bearish sentiment. At present, it would take short sellers 3.14 days to cover their positions.
However, there isn’t a single company-specific cause that can be pointed to in order to explain the recent drop in stock price and increased short interest.
Macroeconomic factors, such as resurgent inflation worries and the increased likelihood of fewer rate cuts, caused a wider market selloff — and instances such as these do not spare underperformers like Lucid. All in all, the recent developments are the result of continued weakness — not some new factor.
Lucid’s fundamental outlook going forward hasn’t shifted or become worse. In fact, on January 6, the carmaker released its Q4 production and delivery figures — both of which beat analyst estimates. In addition, this made up for the H1 miss — as the business managed to meet its production target of 9,000 vehicles for the year.
Wall Street isn’t convinced — at present, the average price target for Lucid stock is $2.91 — and while the 1.68% downside is far from catastrophic, it’s equally as far from being a vote of confidence.
Featured image via Shutterstock
