Is Lucid Stock a Buy Now?
Lucid (NASDAQ: LCID) had to do something that no company really wants to do -- it exchanged one share of new Lucid stock for 10 old shares. This is called a reverse stock split, and it normally only happens when a company's stock price has fallen so low that it risks being de-listed by a stock exchange. Now that the reverse split has occurred, is Lucid worth buying?
When a company is told by the exchange on which it trades that it may be de-listed, it creates a major problem. Essentially, that company's access to capital markets is being put at risk. For a start-up like Lucid, which is attempting to build an electric car company from the ground up, that could be a disaster. Access to capital is the company's lifeblood, since it is still losing money on every car it makes.
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Source Fool.com
