Hudson Labs provides machine-learned forensic risk assessment tools and advanced SEC filing navigation. Our proprietary risk scores and red flags predict price collapse. Learn more on our Research & White Papers page.
Hudson Labs started predicting a crisis at Lucid Group (LCID) as early as November 2021. At that time Lucid's stock price had reached an all time high with a price per share over $50. Since then Lucid's stock price has plunged to under $9, as of December, 2022, a drop greater than 80%. In fact, Lucid Group was one of the worst performing stocks in the Russell 2000.
In addition to Lucid’s high Hudson Labs risk score (top 7%), we flagged severe red flags to our subscribers.
Red flags at Lucid Group flagged by Hudson Labs algorithms during 2021 included:
- Accounting adjustments and material weaknesses in internal controls.
- Related party transactions, including an agreement with a related entity (Public Investment Fund) that would involve a $1M reimbursement for a talent development program. Learn more about the risks of related party transactions in our Red Flag Guide.
- A regulatory subpoena from the Securities Exchange Commission (received in December 2021).
Lucid went public via a Special Purpose Acquisition Company (SPAC) merger. Quite a few of these types of companies have experienced issues later in their lives. We wrote a number of articles about issues at SPACs. Find "Non-timely filings increase by 40%+ in 2022, fueled by SPACs", “They’re finding themselves in situations where they’re not ready for prime time", "Withum and Marcum audited over 78% of all SPACs since 2020" and more on our blog.
The Hudson Labs team wrote a Twitter thread in November 2021, detailing many red flags at Lucid. This thread was at the stock price's peak and before the SEC investigation had been disclosed.
A snapshot of Hudson Labs' machine-learned red flags from 2021, as shown on our web platform:
