Shares of luxury electric car-maker Lucid Group (LCID 2.61%) shorted out Wednesday morning, falling more than 5% in response to news reports that six of the company's top executives have either been fired, or departed Lucid for greener pastures on their own.
By afternoon, the stock had recovered somewhat, but remains down 0.8% as of 12:45 p.m. ET.
According to Business Insider, the departures include two company vice presidents (of global manufacturing and of programs), two "heads" (of Arizona operations and of new product introduction), one senior manager of logistics engineering, and one director of "operational excellence." Business Insider further reports that the executives were "high level" and were all tied to company efforts to improve production at its Casa Grande, Arizona plant -- which churned out only 1,405 electric cars in H1, and is aiming to produce between 6,000 and 7,000 units through the end of this year.
So should Lucid investors be concerned?
Perhaps, if the departures were at the executives' own volition -- sailors abandoning a sinking ship, so to speak. Still, a blog devoted to Lucid news, Lucid Insider, points out that Lucid CEO Peter Rawlinson promised in the company's last earnings call to overhaul its logistics processes and introduce "a series of improvements to simplify the system," and that the company hired Senior Vice President of Operations Steven David to accomplish this last month. It could be that these executive departures are tied to that effort -- that David is cleaning house as part of an effort to improve production rates.
Ultimately, the proof of this one will be in the pudding -- and in Lucid's Q3 earnings report, which either will or will not show production rates accelerating, and will or will not warn investors that Lucid is going to miss its already twice-revised production forecast for the year. In the meantime, perhaps the best hint investors have that this news isn't anything to be concerned about, is that of the six departing executives named, only one -- ex-Head of New Product Introduction David Peel -- has so far bragged on his LinkedIn page about landing a new job (at Nikola).
The fact that the other five are keeping mum suggests that they didn't leave of their own volition, but were rather forced out in a house-cleaning. Granted, that still raises the possibility that the reason they were forced out was because they were failing to get production back on track -- such that Lucid will still end up missing its production numbers in Q3.
But at least it also suggests Lucid is taking steps to make sure that Q4 will look better than Q3.