Lucid Shares Drop 16% After False Bankruptcy Report

Lucid shares fell more than 40% at one point Tuesday before closing down 16% at $4.62 after a report said the company was considering bankruptcy protection or going private. Trading in the shares was halted multiple times for volatility during the session.

A site focused on electric vehicles said the company had asked AlixPartners to review options including Chapter 11 filing or privatization and to present findings to the board. The same report said AlixPartners had encouraged further restructuring in the U.S. and Europe and a focus on the Gravity SUV.

AlixPartners declined to comment on the report. Lucid stated that the rumors are completely false.

“The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today." — Company statement The company added that AlixPartners is assisting only with improving execution and strengthening operations and has not recommended bankruptcy.”

The company has faced slower-than-expected electric vehicle adoption and the elimination of a $7,500 federal incentive under the Trump administration. Last month the company announced it would lay off 18% of its U.S. workforce as part of a cost-savings plan.

Earlier this month Lucid missed Wall Street expectations for second-quarter deliveries. In May the company suspended its production guidance while evaluating business decisions and seeking to lower elevated vehicle inventory.