The stock of Lucid Group (LCID) is down 15% after the electric vehicle maker announced that it is selling an additional 262.5 million shares to the public.
Selling additional common stock to raise money dilutes the holdings of existing shareholders and is viewed negatively by investors and analysts.
Bank of America (BAC) is acting as the sole underwriter for Lucid’s public offering. The company said it plans to use the money raised from the share sale “for general corporate purposes.”
The new share sale comes as Lucid Group struggles with slower-than-expected demand for its high-priced luxury electric vehicles and rising manufacturing costs.
The company’s main electric vehicle, the Lucid Air, has a starting price of around $100,000 U.S.
Lucid ended the second quarter of this year with $1.35 billion U.S. of cash on hand, down from $1.37 billion U.S. at the end of 2023.
Before today (Oct. 17), Lucid’s stock had declined 34% over the last 12 months to trade at $3.28 U.S. per share.
