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Lucid Group Got a Credibility Boost From Its Prestigious Index Inclusion

InvestorPlace - Stock Market News, Stock Advice & Trading Tips LCID stock may be worth catching at a reduced price as a prominent Wall Street expert sees the wisdom in...

This story originally appeared on InvestorPlace

InvestorPlace - Stock Market News, Stock Advice & Trading Tips - InvestorPlace

It’s not the world’s biggest electric vehicle (EV) manufacturer, but Lucid Group (NASDAQ:LCID) is among the most talked-about companies in the sector. Some folks like LCID stock and others don’t, but it’s practically impossible to ignore this ambitious next-generation automaker.

The Lucid Motors (LCID) logo is displayed in front of an ad for the Air sedan.
Source: T. Schneider /

Informed investors are watching closely, as Lucid Air vehicles should be seen on the roadways in a handful of markets soon. Indeed, the first deliveries of Lucid’s luxury sedan were confirmed not long ago.

It’s too soon to know whether the Lucid Air will be a blockbuster success in terms of vehicle sales. Hopefully, these feature-rich, luxurious EVs will capture the hearts and consumer dollars of open-minded drivers.

It shouldn’t be very long before the next delivery data points are released. In the meantime, there’s exciting news regarding LCID stock, along with a Wall Street expert’s take on how Lucid has shored up its capital position.

LCID Stock at a Glance

If you’re trading Lucid shares based on technical considerations, you’re in luck. It’s not every day that you’ll find a stock with such well-defined support and resistance levels.

Throughout the majority of 2021, LCID stock has remained firmly within the range of $17 and $60. That’s a wide range, no doubt, but we’re talking about a volatile stock here.

As of mid-December, the share price is hovering just below $40 after having pulled back from about $60. This could present an opportunity to start accumulating a long position.

Of course, you don’t have to take a large position in LCID stock at current levels. It’s more sensible to only purchase a few shares if you’ve decided you like the stock. Then, you can add to your position if the stock price goes down.

If you choose to employ that strategy, however, be sure to keep a close watch on that $17 support level. And, at no point in time should you ever over-leverage yourself, even if you believe strongly in Lucid as a company.

A Recognition of Progress

So, here’s the big news that Lucid’s investors have been waiting for. No, it’s not the latest delivery numbers for the Lucid Air, but something just as important.

Specifically, the company was just added to the Nasdaq 100 Index. This is definitely an upgrade for LCID stock. After all, the Nasdaq 100 is considered to be among the most prestigious indices on Wall Street.

As the accompanying press release explains, the Nasdaq 100 is one of the world’s preeminent large-cap growth indices. Moreover, it’s designed to measure the performance of 100 of the largest Nasdaq-listed non-financial companies, based on market capitalization.

“We are proud to join the prestigious Nasdaq-100 Index, a recognition of our progress establishing Lucid in the EV market and our future growth strategy,” commented Sherry House, CFO of Lucid Group.

Bear in mind, it didn’t take Lucid long to achieve this milestone. The company only went public on the Nasdaq in July.

A Wise Decision

In other news, Lucid Group recently announced the company’s intention to sell $1.75 billion worth of convertible senior notes in a private offering. The skeptics might disparagingly call this a cash grab. Lucid’s supporters, on the other hand, could say it’s a savvy move to shore up the company’s capital position.

For his part, Morgan Stanley analyst Adam Jonas seemed to applaud Lucid’s move to “tap the convert market.” He went as far as to call this a “wise decision” on Lucid’s part.

Perhaps Lucid can use the newly-generated cash to grow its business. As Jonas put it, Lucid is effectively “taking advantage of a strong stock price to transform an investor vote of confidence into real/hard dollars.”

Only time will tell whether Lucid Group’s capital-raising strategy yields the benefits that the company’s investors would want to see. So, stay tuned for further developments.

The Takeaway on LCID Stock

Lucid Group’s inclusion in the Nasdaq 100 Index will bring a sense of prestige to both the company and LCID stock. Meanwhile, its issuance of convertible senior notes should provide an opportunity for the company to develop its business.

Not everybody is going to be a fan of Lucid Group. Still, audacious EV-market investors can find reasons to accumulate a small, yet confident position in LCID stock.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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