Lucid Denies Take-Private and Bankruptcy Rumors After Stock Plunge
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Lucid Denies Bankruptcy and Take-Private Reports After Shares Plunge 57%
Lucid Responds to Bankruptcy and Take-Private Speculation
July 14 (Reuters) – Lucid Group on Tuesday denied as “completely false” a blog post saying it was considering a potential take-private transaction or a Chapter 11 bankruptcy filing, after the electric-vehicle maker’s shares tumbled more than 50% in what would be their steepest one-day decline.
Company Statement and Financial Position
Lucid said it had sufficient liquidity to fund operations well into next year, had not formed a special board committee to explore the reported scenarios and said restructuring adviser AlixPartners was assisting the company with improving execution and operations, not recommending bankruptcy.
Role of AlixPartners
The Eletric-Vehicles blog reported that AlixPartners had been asked to present its findings to Lucid’s board before its next meeting and that scenarios under review included taking the company private or seeking Chapter 11 bankruptcy protection, while adding that no decision had been made.
AlixPartners did not immediately respond to a Reuters request for comment.
Stock Market Reaction
Trading in the stock was halted multiple times after 1 p.m. ET because of volatility. The stock fell as much as 57% to $2.37 in afternoon trading.
Lucid’s shares have lost about 99% of their value since the company went public, as it has struggled to turn a profit nearly five years after its market debut.
Restructuring Efforts and Leadership Changes
CEO Silvio Napoli’s Restructuring Initiatives
The report comes as Lucid undergoes a broad restructuring under CEO Silvio Napoli, who took over in June.
Workforce and Leadership Streamlining
Last month, the company said it would cut about 18% of its U.S. workforce, eliminate its chief operating officer role and streamline its leadership structure to reduce costs and improve execution.
(Reporting by Akash Sriram in Bengaluru’ Editing by Tasim Zahid)
