Shares of EV maker Lucid Group (LCID 0.41%) were trading higher again early Tuesday, a day after a huge one-day gain that mystified veteran Wall Street observers.
As of 11 a.m. ET, Lucid's shares were up 10.7% from Monday's close, and up 36.6% on the week so far.
Lucid plans to begin production of its second model, a large luxury SUV called the Gravity, later this year. But that isn't why the stock surged on Monday. Image source: Lucid Group.
Sometimes stocks make unexplained moves, but Lucid's was a whopper
It's not uncommon for a stock to make a significant move that doesn't seem to be driven by news, especially when the company is a not-yet-profitable entrant in a much-hyped space like electric vehicles.
But Lucid's move on Monday was remarkable for the size -- 27% -- and for the volume of shares traded: Almost 124 million shares of Lucid traded hands on Monday, far above its average volume of about 38.3 million.
Lucid did reveal last week that it's working on a third model to follow the Air sedan and large Gravity SUV. It's reportedly a midsize electric crossover expected to start around $50,000. That's roughly the same ballpark as Tesla's huge-selling Model Y and seemingly just the kind of vehicle Lucid needs to help increase its sales.
The report that a more affordable Lucid is on the way is good news for shareholders frustrated by the slow sales of Lucid's flagship Air sedan, but it wasn't exactly a surprise. It definitely wasn't the kind of surprise we'd expect to drive a 27% surge in the stock a few days after the news was widely reported in the automotive media.
So what's going on?
I think Barron's Al Root spoke for many of us when he wrote late on Monday that "it's not clear exactly why" Lucid stock had its best day in about a year yesterday. Here on Tuesday morning, with the upward move continuing, it still isn't clear.
If something is up, Lucid might tell us in February
If something is going on behind the scenes, we may have to wait a few weeks to hear about it from the company. Lucid is scheduled to report its fourth-quarter and full-year 2023 results after the U.S. markets close on Feb. 21.
