Lucid Group NASDAQ:LCID shares fell about 7% in Thursday morning trading as investors weighed growing legal scrutiny and a fresh Wall Street downgrade.
Several law firms are seeking shareholders to join a proposed securities fraud class action against Lucid Group NASDAQ:LCID ahead of a late-July deadline for lead plaintiffs. The litigation comes as the electric-vehicle maker continues to face questions following a weaker first quarter, according to court-related notices.
The pressure on Lucid Group intensified after an analyst lowered its rating to Strong Sell, citing concerns over production execution, cash consumption and the company's financial outlook. Investor sentiment has also been affected by reports of supplier-related issues that allegedly disrupted deliveries of the Lucid Gravity SUV, although the company has denied bankruptcy speculation.
Despite the recent setback, Lucid Group continues to receive financial backing from its largest strategic shareholder, providing funding for vehicle development, robotaxi initiatives and a planned midsize vehicle platform. However, analysts note that ongoing cash burn, negative production margins and rising debt could require additional financing before the company reaches sustained profitability.