Shares of Lucid Group (NASDAQ: LCID) have been in a free fall over the past year, plummeting 76% during that time frame.
Last week, investors were spooked about this already risky stock due to rumors that it was considering filing for bankruptcy
The company denied the reports, telling investors that it has sufficient liquidity to fund its operations. While the stock has been rebounding in recent days, there is no shortage of question marks surrounding the business. Is Lucid’s stock too risky to invest in, and is it in danger of falling even lower, or could it be a steal of a deal given its low valuation?
Lucid’s financials are troubling Regardless of whether Lucid files for bankruptcy or not in the near future, investors should recognize the significant risks associated with investing in the business today. Lucid is fighting for market share in a highly competitive electric vehicle (EV) market. While it has been growing sales in recent years, what’s concerning is that its losses have eclipsed its revenue, raising questions about whether its business is sustainable.