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Lucid Group Inc extends losses as PIPE lockup period nears

  • NASDAQ:LCID fell a further 1.90% on Monday for its fifth straight losing day.
  • Lucid is fast approaching its PIPE investor lock up expiration on September 1st.
  • EV Stocks closed the session mixed as Tesla looks to rev another level higher.

Update: Sept 1: PIPE expiry day is here and LCID shares have certainly panicked with a drop of 22% now to just $15.49. The PIPE transaction was done at $15 so there is not much profit to be made from selling for a mere 49 cents but panic creates panic and that is what could be happening here. Meme stocks are volatile with AMC spiking (see here), SKLZ up 14% (see here) PLTR breaking out (see here) and GME playing catchup (see here). 

Update August 31: Lucid Group Inc (NASDAQ: LCID) has kicked off August’s last trading day with yet another slide, losing some 1% and nearing the psychological barrier of $20. Over the summer month, the electric vehicle company shed some 14% of its value, in what seems like a long “hangover” in response to the completion of the SPAC merger with Churchill Capital Corp IV, which traded with the CCIV ticker. It is essential to note that the broader stock market is ending lower, paring some of its gains recorded during the summer. 

NASDAQ:LCID has started the week off just as it ended the last: in the midst of another losing streak for the SPAC stock. On Monday, shares of Lucid fell a further 1.90% and closed the trading session at $20.63. The move lower came during yet another day where the NASDAQ hit a fresh new all-time high on the strength of big tech. High growth sectors were flying on Monday after dovish comments by the Federal Reserve signalled that it would be a slow approach to tapering monetary stimulus and bond buybacks.

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September 1st marks the expiration of the PIPE investor lock up period for Lucid’s stock. What does this mean? Most stocks that begin publicly trading have a lock up expiry date where insiders or PIPE investors in the case of SPACs, are finally free to cash in on some of their shares. For private companies who use stock-based compensation, we usually witness a selling off of significant blocks of shares, which could have an effect on the stock’s price. Will this happen with Lucid? That remains to be seen, although it should be noted that the lock up for insiders is six to eighteen months down the road. 

LCID stock price forecast

It was a mixed day for the broader electric vehicle sector. Tesla (NASDAQ:TSLA) is always the measuring stick for the industry, and shares finished 2.67% higher on the momentum after it announced its intent to sell electricity in Texas. Meanwhile, Chinese EV stocks were trading mostly lower as Nio (NYSE:NIO) and Li Auto (NASDAQ:LI) fell during the session, the latter after reporting its earnings before the markets opened. 

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