Shares of Lucid Group Inc. tumbled sharply on Tuesday, trading about 40% lower after earlier declines reached roughly 55% as market participants reacted to reports that the electric-vehicle maker was weighing major restructuring moves.
In an emailed response to Bloomberg, Lucid acknowledged it is working with restructuring adviser AlixPartners but pushed back on claims that a bankruptcy filing is imminent. The company said reports that it might seek protection under Chapter 11 are "completely false," adding that AlixPartners is focused on "assisting in improving execution" and has not recommended bankruptcy.
Earlier in the day electric-vehicles.com published a report saying Lucid was evaluating a range of restructuring options. That report prompted multiple trading halts for volatility, and said AlixPartners had been asked to compile findings for presentation to Lucid's board before the company's next scheduled meeting.
The same report listed strategic alternatives under consideration that include taking the Saudi-backed automaker private or filing for Chapter 11 bankruptcy protection. Bloomberg later reaffirmed those themes, noting the company is concentrating on optimizing its business, cutting costs and pursuing a successful rollout of a new mid-size vehicle.
Lucid has said it has enough cash to operate into the second half of next year and has relied on financial support from the Public Investment Fund of Saudi Arabia, the company's largest shareholder, to fund operations as it brings new models to market.
Market ripples were not limited to Lucid. Shares of Rivian Automotive Inc., another U.S. EV maker, fell about 3% following the initial report.
Contextual note - The company, adviser and market moves described here are based on the statements and reports cited above. No recommendation or new operational detail beyond those reported was provided by the company in its emailed statement.