Lucid Motors (NASDAQ:LCID) stock fell after it was taken off the Nasdaq 100 index.
The move was expected. It was part of the index’s annual reconstitution.
Still, it took 5% off Lucid’s stock price over the weekend, almost wiping out a 6% gain in trading on Dec. 8. Shares in New York opened at $4.49, a market capitalization of about $10.3 billion.
Sheikhs No Longer Chic
Other stocks being dropped from the index are Align Technology (NASDAQ:ALGN), Enphase Energy (NASDAQ:ENPH), JD.com (NASDAQ:JD) and Zoom Video (NASDAQ:ZM).
Replacing them are technology re-seller CDW (NASDAQ:CDW), soft drink bottler Coca-Cola Europacific Partners (NASDAQ:CCEP), and delivery company DoorDash (NASDAQ:DASH).
Three software companies, MongoDB (NASDAQ:MDB), Roper Technologies (NASDAQ:ROP) and Splunk (NASDAQ:SPLK), were also added to the index.
The move should put pressure on Lucid over the next week. Asset managers need to rebalance their own portfolios to match the index.
Lucid is down 27% in 2023 as the high end of the electric vehicle market has become saturated. Lucid’s Air sedan prices start at over $80,000 and are being made at a plant in Arizona. However, Saudi Arabia’s Public Investment Fund (PIF) owns most of the company. Lucid has promised to build a plant in the desert kingdom.
Lucid has reportedly been losing $338,000 per car. The company recently cut its production forecast for 2023. The Saudis have made its design the heart of a global concern, buying stakes in England’s Aston Martin (OTCMKTS:AMGDF) and China’s Human Horizons.
Analysts like InvestorPlace contributor Rich Duprey have soured on Lucid. He admits, however, that the Saudis give it plenty of liquidity to weather an expected stall in demand next year.
LCID Stock: What Happens Next?
The Sauds’ move into Lucid was always greenwashing. It is an effort to wash away its reputation for oil with some environmental investment. The Kingdom wants attention at the COP28 summit shifted away from oil and gas.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
