What happened
Investors have been unloading shares of electric vehicle start-up Lucid Group (LCID -1.39%) for the past two weeks, ever since it released its quarterly update and announced that it was cutting its production forecast for 2022 due to supply chain and other issues. Shares are now down by more than 25% since that report came out -- a decline that includes a dip of 6% on Monday.
So what
Monday's drop may be part of the continued selling triggered by that report, but another likely contributor to it is a filing that Lucid made with the Securities and Exchange Commission late last week reporting that CEO and Chief Technology Officer Peter Rawlinson had just sold nearly 8 million shares worth more than $180 million.
However, just a bit of digging reveals that Rawlinson isn't selling because of any recent change in his views about the company's prospects. This share sale was planned almost eight months ago in July 2021.
Image source: Lucid Group.
Now what
This share sale was scheduled in July as part of Rawlinson's tax planning regarding restricted stock unit (RSU) compensation that he was awarded in March 2021. Those RSUs are subject to time-based or performance-based conditions. As explained in the SEC filing, this sale "represent[s] shares that have been withheld by the issuer to satisfy income tax withholding and remittance obligations in connection with the vesting of restricted stock units reported on a Form 4 filed on July 27, 2021."
Rawlinson still owns nearly 52 million shares of Lucid. For investors, this disclosure isn't something important to focus on. Rather, with the company now claiming more than 25,000 customer reservations for its electric vehicles, what investors should monitor is the progress it makes on its plan to produce between 12,000 and 14,000 EVs in 2022. That's down from its previous expectation that it would be able to manufacture 20,000 vehicles this year. What the company achieves on that front should determine where the stock goes from here.
