On July 17, Lucid(LCID.US) announced a 10-1 reverse stock split.

This news added more anxiety and fear among individual investors, after their concern was based on:
The stock fell below $2.
- Achieving production and sales targets
- Low level of cash burn on operating expenses

👈 Will Lucid succeed in maintaining the stock price after the split and attracting investment funds?

The most important issue is the stability of profitability and the level of spending discipline after the split. If Lucid successfully executes the planned reverse split (1:10) and attracts institutional interest afterward, with the company beginning to see tangible operational improvements (reduced losses, revenue growth, and spending discipline), the most likely success model would be Hertz or GE, rather than a fast-growing market for growth companies like Tesla. However, if Lucid continues to underperform despite the split, it could follow the path of companies that have exploded for the worse, such as DryShips or Faraday Future, which achieved temporary highs before collapsing again.

🌟 Historically, there are similar cases to Lucid in terms of financial circumstances. It undertook a reverse split, improved its financials, reduced its cash burn, and then the stock price rose several times its price after the split. For example:

Priceline (currently Booking Booking(BKNG.US) )

It executed a 1-for-6 reverse split in June 2003, from a price of about $3–4 to about $25. The stock then rose to about $40 within three months, but stabilized and then rebounded as the company's fundamentals improved, and today it is worth more than $5,600 per share.

Laboratory Corp. of Laboratory Corporation of America Holdings(LH.US) )

It underwent a 1-for-10 reverse split after a long period of trading at low prices. Following the split, the stock recovered and rose to the point of a subsequent normal split, and today it is trading above $200.

🔴 There are companies that have experienced a collapse in their stock prices and then bankruptcy.. For example:

- Lordstown Motors ( LORDSTOWN MOTORS CORP(RIDE.US) )
- Proterra ( Proterra Inc - Common Stock(PTRA.US) )
Nikola Motors ( NIKOLA CORPORATION(NKLA.US) )
- Faraday Future ( Faraday Future Intelligent Electric Inc (FFAI.US) )

👈 All of these companies operate in the field of electric cars and have financial conditions similar to Lucid, including:
🔴 Expensive luxury product.
🔴 Inability to produce in commercial quantities.
🔴 High cash burn rate.
🔴 Very weak sales compared to announced plans.
🔴 Limited production.
🔴 Not making real profits.
🔴 Relying on government funding and investment companies.

🔴 Failure to secure sustainable financing partnerships.
🔴 Low income versus huge expenditures on research and development.