(MENAFN- AsiaNet News)

• Ortex data showed short interest rising again as Lucid shares fell sharply following its latest convertible note offering.
• Stifel and Benchmark lowered price targets after the company detailed new funding plans and offered $875 million in convertible notes.
• The renewed pressure came after last week's all-time low, when Lucid launched a cheaper Gravity variant amid slowing EV demand and ongoing production challenges.

Short sellers have stepped up their bets against Lucid Group for a second straight week as the luxury EV maker's stock continues a steep decline that has erased about two-thirds of its value since mid-July. 

Short Interest Climbs As Stock Extends Slide

Ortex data compiled by The Fly showed short interest as a percentage of free float rising from 29.3% to 32.9%, putting it within a percentage point of the record levels seen in early July. The increase came during a week when Lucid shares fell about 23% following the company's $875 million convertible note offering announced on Nov. 11. Despite a 5% rebound on Friday, the stock remains down 59% for the year amid weakening EV demand, softer consumer sentiment and shrinking market share.

The convertible deal, which includes a $100 million greenshoe and carries a 7% coupon, could add about 42 million –47 million shares at full conversion, according to Benchmark, which noted the estimated conversion premium tied to a $16.99 last sale price.

Lucid's slump comes amid financial, operational, and demand-related pressures across the EV sector.

Analyst Price Targets Fall Ahead Of Funding Needs

Analysts also trimmed expectations as the stock retreated. Stifel lowered its price target to $17 from $21 following third-quarter (Q3) results, maintaining a 'Hold' rating and saying the company will likely require additional capital over the next few years, despite its continued confidence in Lucid's technology and product lineup. Over a week earlier, Benchmark cut its price target to $30 from $70, adjusting for the recent reverse split and retaining a 'Buy' rating.

Gravity Update Adds Pressure

The growing short interest follows a tough stretch for the company. Last week, Lucid shares hit an all-time low after the company introduced a cheaper variant of its Gravity SUV, the Gravity Touring, to reach more customers.

The new Touring trim starts at $79,900, below the $94,900 Grand Touring model, and keeps the core hardware of the lineup, including dual-motor AWD, fast charging capabilities, 337 miles of estimated range, and access to Tesla's Supercharger network. Lucid said orders are open and some configurations are available for immediate delivery.

Market Headwinds Persist

Lucid continues to contend with slowing EV sales after the expiration of the $7,500 federal credit in September. The company's Q3 revenue of $336.6 million came in below analyst expectations, and it reduced its full-year production forecast to roughly 18,000 units due to supply-chain constraints affecting Gravity output.

Those issues include a chip shortage, limited supplies of rare-earth materials and delays following a September fire at an aluminum supplier. The uneven Gravity rollout, with early deliveries temporarily halted in early 2025 and sales still in the three-digit range by August, has added to pressure.

The company has delivered some Gravity units to Saudi Arabia and announced a robotaxi partnership with Uber and Nuro involving at least 20,000 vehicles expected to begin launching next year. Lucid has also intermittently covered the value of the federal credit for customers to offset demand softness before ending the incentive.

Stocktwits Traders Show Muted Mood

On Stocktwits, retail sentiment for Lucid was 'neutral' amid 'normal' message volume.

LCID sentiment and message volume as of November 23 | Source: Stocktwits

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