Why Lucid Group Stock (LCID) Is Crashing Today -- Should You Buy the Dip?

Key Points

• Lucid's 10-for-1 reverse stock split took effect this week, sending shares lower.

• While the split itself doesn't impact the value of a shareholder's stake, it was taken as another sign that Lucid is in trouble.

• 10 stocks we like better than Lucid Group ›

Shares of Lucid (NASDAQ: LCID) are falling again on Thursday, down 7.5% as of 1:55 p.m. ET. The drop comes as the S&P 500 and the Nasdaq Composite both gained 0.5%.

The troubled electric vehicle (EV) maker's stock is falling for the third day in a row after it executed a reverse stock split earlier this week.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Lucid stock falls 20% after split

When trading opened on Tuesday, Lucid shareholders had 10% as many shares, each of which was worth 10 times as much. While this reverse split -- in theory -- doesn't affect the overall value of an investor's stake, it has in practice. In contrast to a forward stock split, the market doesn't generally look kindly on a reverse split, seeing it as a sign the company is in trouble. More often than not, they are used by companies that are at risk of delisting from the Nasdaq Stock Market or the New York Stock Exchange, which require minimum share values of $1.

Image source: Getty Images.

Lucid shares weren't under the $1 cutoff when the split was announced, and the company indicated that the decision was made to make the stock more attractive to institutional investors who often have their own minimum values for shares they'll consider buying above $1. Still, whatever the reason, the split has hammered Lucid Shares. They are now down nearly 20% from this week's opening bell.

Lucid is in hot water

While this might look like a great time to jump in and buy Lucid shares at a discount, I think they could continue to fall much further. I don't have faith that the company can execute the turnaround it desperately needs. I would stay away from Lucid stock.

Should you invest $1,000 in Lucid Group right now?

Before you buy stock in Lucid Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lucid Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $661,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,045,818!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 184% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.