Speaking with Bloomberg, Lucid‘s interim CEO Marc Winterhoff dismissed delisting concerns on Thursday, a few hours after the EV maker announced plans to execute a 1 to 10 reverse stock split.
The interim CEO, who joined Lucid as Chief Operating Officer in late 2023 and took over from Peter Rawlinson in February, was asked whether the reverse stock split was motivated by concerns about a potential delisting of the company’s shares.
“The listing happens when you are under $1, correct?” Winterhoff asked, referring to the Nasdaq listing rule, which requires publicly listed companies to trade above the $1 threshold.
Lucid shares hit an all-time low last November at $1.93.
“I don’t think we were anywhere close to below $1 but that was not the reason,” he added.
Lucid shares closed at $2.29 on Wednesday, a day before the reverse stock split and the Uber and Nuro partnership announcements.
On Thursday’s pre-market trading session, the stock soared about 61% to $3.69 immediately after both announcements.
“Its actual reason is that when you are on a certain level or below a certain level, certain institutional investors cannot invest into your stock,” Winterhoff stated.
Many institutions avoid purchasing stocks priced below $5 because they are viewed as higher-risk and more volatile investments.
“In order to open that investment market for us — that’s why we did this — and also to reduce volatility — This is the only reason us,” he stated.
“It’s more [of] a technical thing that we’re implementing in order to make it easier for us, and also to participate in the stock market,” Lucid’s chief concluded.
The 1-for-10 reverse stock split needs approval from stockholders at a special meeting before it can be authorized by the company’s Board of Directors.
Lucid said in a statement that it believes the reverse stock split will “allow the Company’s common stock to be more attractive to a broader range of investors and other market participants.”
In September 2018, PIF committed $1 billion to Lucid to help finance the development of the Air sedan, construction of the Casa Grande factory in Arizona, and the launch of retail operations in North America.
In August 2024, Lucid announced PIF would inject up to $1.5 billion in fresh capital.
Two months later, in October, the company warned of a larger-than-expected third-quarter loss and launched a public offering of more than 262 million shares — triggering a 12% drop in after-hours trading.
