My uncle, bless his heart, once invested in a company that made self-folding laundry. It seemed foolproof, a solution to a problem we all share, and he was convinced it would make him a millionaire. It didn’t. It mostly made a lot of tangled socks. I thought of him the other day when I glanced at the stock price of Lucid Group (LCID 5.48%). It’s hovering just below ten dollars, which is…interesting. They did a reverse split recently, you see. A little financial origami, designed to make the numbers look less…panicked. Without it, they’d be officially penny stock territory, and my aunt would be giving me that look again.
The Problem with Promises
The stock is down about fifty percent since that little bit of accounting magic. People say that happens. Like getting a flat tire or realizing you’ve worn mismatched shoes all day. It’s just…common. But it feels less ‘common’ and more ‘ominous’ when we’re talking about billions of dollars. Wall Street, it seems, is a bit twitchy. They’ve seen this movie before. A lot of bright ideas, a lot of capital, and then…well, then the laundry piles up.
Lucid is losing money, predictably. Building cars from scratch isn’t like assembling IKEA furniture, no matter how much they try to streamline the process. There’s a reason the established automakers are, well, established. They’ve already endured the years of red ink, the factory fires, the inevitable recalls. Lucid is trying to elbow its way into this crowded market, and it’s…ambitious. Like deciding to learn the tuba at age fifty.
They produced more cars last quarter, and revenue was up year-over-year, which is good, I suppose. But it wasn’t enough. Analysts are a demanding bunch. They want exponential growth, hockey-stick projections. And Lucid, despite all the effort, is still bleeding cash at a rate that makes me check my own bank account. They lost over three dollars a share last quarter, and twelve for the year. I’ve lost less than that on bad airline peanuts.
A Drop in the Bucket
Lucid makes beautiful cars, I’ll give them that. And the battery technology is impressive. They’re ramping up production, which is a start. But even if they hit their goal of 27,000 EVs next year, it’s a rounding error compared to Tesla (TSLA 1.52%). Tesla made over a million and a half vehicles last year. It’s like comparing a hummingbird to a 747.
Basically, Lucid is a money-losing startup playing catch-up in a very competitive race. They have about $4.6 billion in cash, which sounds like a lot until you consider how much it costs to build a car factory, develop new technology, and convince people to switch from gasoline. It’s a steep hill to climb.
I’m not saying it’s a lost cause. But if you’re considering investing, you need a strong stomach and a healthy dose of skepticism. The question isn’t how high this stock could go if everything goes right, it’s how low it could fall if it doesn’t. And the answer, unfortunately, is worryingly close to zero. I’ve seen this play out before, with companies like Nikola, Canoo, and Fisker. They all started with big dreams and ended up in bankruptcy court. It’s a cautionary tale, and one that my uncle, with his self-folding laundry, understands all too well.
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2026-02-28 10:12