Lucid Group's stock experienced a decline on September 2, following the completion of its one-for-10 reverse stock split. Shares of the electric vehicle maker fell 10.8%, closing at $17.
The reverse stock split artificially changes a company's stock price and outstanding share count, with the intention of boosting the per-share price. However, traders sometimes interpret reverse splits as a sign that a share price may fall further.
This immediate market reaction highlights investor sentiment surrounding such corporate actions, which, despite aiming to improve stock optics, can be met with skepticism regarding underlying company performance.
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