Boy, August has been a rough month for certain companies, and Lucid Motors (NASDAQ:LCID) certainly makes the list. This once-popular de-SPAC stock has been hit hard this summer. In the month of August alone, shares of LCID stock lost approximately 20%.
Now, this summer has been an intriguing time for growth investors. A range of fluctuations in bond yields, concerns about inflation, and supply shortages have hit specific growth sectors hard. For EV investors, it has been a rather bumpy month overall.
However, Lucid’s decline has been far worse than many of its EV peers. Let’s dive into three reasons why this may have been the case.
Why LCID Stock Has Underperformed in August
The first bearish catalyst many investors look to with LCID stock is simply the fact that this is a de-SPAC company. Indeed, interest in special purpose acquisition companies, and the resulting merged entities coming out of these business combinations, has waned. As a pre-revenue company, investors are betting on their ability to sell shares in a speculative growth stock for more than they paid. Given the fact it is becoming more difficult for SPACs to raise money due to valuation concerns, as well as redemption issues of late, SPACs and de-SPAC companies have been put on the back burner by many growth investors.
The second company-specific catalyst hurting LCID stock has been the lockup expiration for specific shares in September. Most companies that put a lockup period for their shares often see selling before said expiration date. In the case of LCID stock, one of the expiration periods expired Sept. 1. This led many investors to head for the exits before the selling began, which caused a rather bearish trend near the end of the month.
Finally, Lucid Motors has kept its cards relatively close to its chest when it comes to exact production timelines. Investors expect to see the company’s Lucid Air sometime in the second half of this year. However, this date has already been pushed back, and some investors seem to be losing patience.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
