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Why Lucid stock might crash today

Why Lucid stock might crash today

By and large, the luxury electric vehicle (EV) maker Lucid Motors (NASDAQ: LCID) has been having a bad 2023. The company’s struggles are made evident by its decision to decrease the delivery targets for the year announced in November and by the seemingly ever-falling price of its shares on the stock market.

The EV maker is set to receive another hit on Monday, December 18, as its stock will be removed from the prestigious Nasdaq-100 index – an index that tracks the 100 biggest non-finance stocks listed on the marketplace. The decision to remove LCID was reached earlier in December during Nasdaq’s annual restructuring.

The removal is likely to put significant selling pressure on the stock as funds tracking the index will be compelled to offload LCID and take on the shares of companies newly added to Nasdaq-100, such as DoorDash, Inc. (Nasdaq: DASH) and Splunk Inc. (Nasdaq: SPLK). The change also has the potential to dampen Lucid’s longer-term prospects, as the removal from the prominent index is likely to adversely affect the visibility of the stock.

Still, this does not guarantee that Lucid is guaranteed to fail as multiple companies that have previously been removed – such as Blackberry (NYSE: BB) – managed to survive the ordeal, and some, including Tesla (NASDAQ: TSLA), a major competitor of Lucid, managed to make a comeback and even thrived becoming a household name.

Can Lucid avoid going to $0?

The grim year for Lucid made many investors wonder if the company even has a future. This became increasingly true after the company’s chief financial officer, Sherry House, announced her resignation, effective immediately, on December 12  – mere days after the Nasdaq-100 restructuring was announced.

Still, it is worth remembering that the entire EV market has experienced a marked slowdown in 2023, and other companies – giants like Tesla and BYD (HKEX: 1211) included – have had to implement measures such as lowering the prices of their vehicles to offset the low demand.

On the other hand, among the prominent companies in the industry, it is evident that companies like Nio (NYSE: NIO) and Lucid took the biggest hit, with even the latter’s generous $10,000 cashback program failing to provide a meaningful bump to 2023 deliveries.

Finally, while the year was filled with setbacks, and while Lucid failed to meet the growth expectations laid out during its initial public offering (IPO), the company is still very much in business and, as seen with its recent heightened volatility and a slight rally, may recover depending on what the New Year brings.

LCID price analysis

At the close of the latest full trading day – Friday, December 15 – LCID seemingly decisively ended its lukewarm rally and declined as much as 7.20% to the price of $4.77. Still, despite the scheduled removal from Nasdaq-100, the shares of the EV maker have regained some ground in Monday’s premarket and are 2.94% in the green at the time of publication.

LCID 1-day stock price. Source: Finbold

Zooming out, LCID has grown overall in the last week and is up 5.65%. Its rally is even more evident in the previous 30 days as the company is 9.91% in the green in the period. 

Still, despite the recent optimism, the company has been on a steady downward trajectory in 2023 and is down a total of 22.69% since January 1, and 51.77% since it went public.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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