Lucid’s Desperate Gamble: Reverse Split & the EV Abyss

Electric vehicle (EV) manufacturer Lucid Group (LCID) is making headlines again… a headline that reeks of desperation and impending doom. This isn’t just bad news-it’s a financial Molotov cocktail tossed into the already smoldering ruins of the EV industry.

The luxury Lucid Air sedan and Gravity SUV-vehicles that once promised salvation-are now staging a 1-for-10 reverse stock split. Effective 5 p.m. on Friday, Aug. 29, this move isn’t just a numbers game. It’s a Hail Mary pass from a company that’s already bleeding cash and credibility. Since the split’s announcement on July 17, the stock has plummeted like a lead balloon-down over 30%. Welcome to the circus, folks. The elephants are already trampled.

But here’s the madness: could there be an advantage to buying before the split? Let’s laugh at that. It’s like betting on a horse that’s already buried. You’re just digging a deeper grave for your portfolio.

How the reverse split will work

Reverse splits are the financial equivalent of a magician sawing a woman in half-everyone knows the trick, but no one wants to look away. Lucid claims it’s not about dodging Nasdaq’s $1 minimum-it’s about appeasing institutional buyers’ “internal minimums.” Bullshit. This is a company clinging to a ledge with its fingernails, and the split is just another way to pretend the cliff isn’t there.

After the split, your 100 shares at $2 will become 10 shares at $20. Same value. Same illusion of value. Lucid’s market cap? Still $6.3 billion. Unless the market goes feral post-split, which it will. This is a casino game where the house always wins-and the players are all drunk on delusion.

But wait! Here’s the real kicker: a flurry of selling. Not buying. Selling. Because when investors realize they’ve been had, they’ll panic-sell like it’s the end of the world. And in this case, it might be.

A likely price drop

Research? Ha! Let me tell you what research says: reverse splits are a death sentence. Stocks that undergo this ritual often collapse-like a house of cards built on lies. The day of the split? A 7% drop. Then a slow bleed over weeks. Why? Because odd-lot shares get liquidated, and short-sellers turn into feral hounds. It’s a bloodbath.

Case in point: Canoo. That poor bastard did a 20-for-1 split in December 2024, then filed for bankruptcy. Its stock dropped 7% the day of the split, then another 20% in weeks. Lucid isn’t Canoo-it’s worse. It’s Canoo with a hangover and a credit card debt.

So, investors: wait. Wait until after the split. Wait until the smoke clears. Wait until you can see the bottom of the abyss-and maybe even then, don’t jump in.

Plenty of time to buy

Lucid’s latest earnings report? A dumpster fire. Larger-than-expected losses. Production forecasts slashed. And the $7,500 federal EV tax credit? Gone by Sept. 30. The EV market is a sinking ship, and Lucid is the guy on the deck playing the fiddle while the rest of us drown.

Oh, sure-there are “bright spots.” A robotaxi partnership with Uber. Record battery life. A 38% increase in deliveries. But what does it matter when the company is burning cash like it’s gasoline and the Gravity SUV production is stuck in neutral? This is a high-risk/high-reward play, but the reward is a mirage.

Investors should not rush in. Watch the split like a hawk. Watch the price like it’s a ticking time bomb. And when the dust settles? Maybe-just maybe-there’ll be a chance to pick through the wreckage. If you’re lucky. If you’re sober. If you’re not already dead from the madness.

2025-08-29 21:23

How the reverse split will work

A likely price drop

Plenty of time to buy

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