• EV maker says it has funding to keep operating well into next year.
  • Lucid’s CEO says bankruptcy or going private isn’t under discussion.
  • The report came shortly after Lucid let go 18 percent of its US workforce.

Lucid has forcefully denied speculation that it could file for bankruptcy, going so far as to send a cease-and-desist letter to the publication that claimed the automaker was weighing Chapter 11 protection or a take-private deal. The company’s response has been unusually aggressive for a matter it insists carries no substance, escalating from a public rebuttal to legal action and a regulatory filing in a matter of days.

Read: Lucid To Lay Off 18% Of Its US Workforce, Just Four Months After Cutting 12%

It all started earlier this week, when media outlet @EV_carba (Electric-Vehicles.com) reported that it had heard from unnamed sources that Lucid had been in talks with advisor AlixPartners, which reportedly urged it to restructure in the US and Europe and to prioritize the Gravity SUV. That could mean filing for bankruptcy protection or going private, prompted by the company’s struggling share price and pressure from Saudi Arabian investors.

The CEO Responds

A Bankruptcy Rumor Halved Lucid’s Stock. CEO’s Denial Sent It Up 29%

Lucid quickly responded to the report. Writing on LinkedIn, chief executive Silvio Napoli labeled the reports “false,” although he did not deny that the EV maker is working with outside advisors to improve.

“Lucid is not considering bankruptcy or a transaction to take the company private,” he said. “Those reports are false. The Board did not explore either scenario. Period. As disclosed in our most recent quarterly filing, Lucid has sufficient liquidity to fund its operations well into next year.”

“We work with outside advisors to improve operational performance and execution. They are not advising Lucid on a take-private transaction or bankruptcy, and any suggestion that they have recommended either course of action to management or the Board is false.”

Screenshots have since emerged online showing the cease-and-desist letter that Lucid sent to electric-vehicles, the website that published the report. It said that “publication of inaccurate factual statements concerning a publicly traded company is extraordinarily serious,” noting it “undermines investor confidence, creates unnecessary uncertainty, and can materially distort the market’s assessment of the company.”

Shares Plummet, Then Rebound

A Bankruptcy Rumor Halved Lucid’s Stock. CEO’s Denial Sent It Up 29%

Lucid also directly blamed the report for prompting a sell-off of its shares, noting prices fell from $5.51 to as low as $2.37, causing “serious injury to a number of investors.” The stock shed more than half its value at Tuesday’s intraday lows and was halted several times for volatility before the denial pared the damage, leaving it down about 16 percent at the close.

However, the recovery came fast. As The Motley Fool reported, shares rocketed 28.8 percent on Wednesday to close at $5.95, slightly above where they traded before the report broke, on volume of 55.6 million shares, roughly 169 percent above the three-month average. The rebound stretched into a second day, with the stock climbing another 12 percent on Thursday to trade around $6.69, back above its 50-day moving average for the first time since the rumors surfaced.

Regardless of where the truth lies, it’s obvious that things are not going that well for Lucid. In June, it said it was laying off 18 percent of its US employees, just four months after a separate round of layoffs cut its local workforce by 12 percent.

A Bankruptcy Rumor Halved Lucid’s Stock. CEO’s Denial Sent It Up 29%