LCID Stocktwits: Is LCID still a high-risk investment?

LCID is set to report their Q4 earnings on February 28th, 2021. Bulls are expecting this report to be good even though LCID missed their previous earnings by $0.15. Additionally, with their recent recall, some are skeptical about this earnings report. LCID Stocktwits: To find some general information about LCID, I decided to take a look at the messages posted in the LCID Stocktwits to see what the retail investors see in the LCID stock. The majority of bulls are mentioning “Q4 Earnings Report” and “Short Squeeze” insider of the LCID Stocktwits forum. Secondly, bulls have pointed out the possibility of a short squeeze. Currently, LCID has 16% short interest with 0.4M short shares available, and a short borrow fees of 8.3%. Overall, I do not think that the short fees and the short interest are high enough to cause a short squeeze in the next 3.98 days (as there are 3.98 days to cover). LCID Stock Overview: The EV industry is a very speculative, new, and volatile sector in the stock market, and $LCID – Lucid Motors stock is no different. LCID has undergone some wild swings in their price over the last year, jumping 427%, and 177% within the span of 1 months (early 2021), and 1 month (late 2021) respectively. These are very large spikes in the LCID stock price and show the speculative and volatile nature of the LCID Stock. Additionally, after each spike, the LCID stock then went on to drop by 63%, and 50%, in the month following their high. As we can see, LCID can provide a lot of upside, however, it is followed by a large downside (which is easier to predict than the LCID stock spikes). LCID is one of the most followed stocks on Stocktwits, as the LCID Stocktwits forum has 195,000 followers, and over 2,500 daily messages. StockTwits is not the best source for investment information and advice (obviously), but it helps us to gain a proxy for retail investment sentiment and ideas. The LCID StockTwits forum garners over 450k impressions daily and has a 76% bullish sentiment (On LCID Stocktwits). By looking at some simple figures, we can see that the LCID Stocktwits community (and retail investment community) likes LCID… but is it any good? Massive Historical Shareholder Dilution for LCID Stock Holders: After LCID’s PIPE share lock-up period expired, LCID stock has went from 1.42B shares outstanding to 1.62B shares outstanding. This increase represents a 14% increase in shares outstanding, in just 4 months. This is not a lot considering LCID is a very new stock on the market, furthermore, the dilution seems to be slowing own quickly. LCID Stock Financial Position: Typically, high growth stocks will have high dilution figures, but will have large revenue growth (even if their net income is decreasing). However, their earnings are very bad with their most recent quarterly report stating $230k in revenues, a gross profit of -$3M, an operating income of -$497M, and a net income of -$524M. Overall, LCID has very high dilution, and has not been growing their revenues at all. This to me sounds like a very easy short (bear) position. However, is there more to this story than I am considering? If so, please let me know in the comments. Overall Thoughts on LCID Stock: Overall, I think the best way to profit off of LCID Stock is to go long after you analyze their earnings report. I think that for the next week I would be bearish, however, if there is a big drop after earnings, I think the reward would be greater than the risk (in terms of going long). Alternatively, if their earnings are good, you can analyze it (in detail) to see if an investment is a good long-term decision.

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LCID Stocktwits: Is LCID still a high-risk investment?

bullish

LCID is set to report their Q4 earnings on February 28th, 2021. Bulls are expecting this report to be good even though LCID missed their previous earnings by $0.15. Additionally, with their recent recall, some are skeptical about this earnings report.

LCID Stocktwits:

To find some general information about LCID, I decided to take a look at the messages posted in the LCID Stocktwits to see what the retail investors see in the LCID stock.

The majority of bulls are mentioning “Q4 Earnings Report” and “Short Squeeze” insider of the LCID Stocktwits forum.

Secondly, bulls have pointed out the possibility of a short squeeze. Currently, LCID has 16% short interest with 0.4M short shares available, and a short borrow fees of 8.3%. Overall, I do not think that the short fees and the short interest are high enough to cause a short squeeze in the next 3.98 days (as there are 3.98 days to cover).

LCID Stock Overview:

The EV industry is a very speculative, new, and volatile sector in the stock market, and $LCID - Lucid Motors stock is no different. LCID has undergone some wild swings in their price over the last year, jumping 427%, and 177% within the span of 1 months (early 2021), and 1 month (late 2021) respectively. These are very large spikes in the LCID stock price and show the speculative and volatile nature of the LCID Stock. Additionally, after each spike, the LCID stock then went on to drop by 63%, and 50%, in the month following their high. As we can see, LCID can provide a lot of upside, however, it is followed by a large downside (which is easier to predict than the LCID stock spikes).

LCID is one of the most followed stocks on Stocktwits, as the LCID Stocktwits forum has 195,000 followers, and over 2,500 daily messages. StockTwits is not the best source for investment information and advice (obviously), but it helps us to gain a proxy for retail investment sentiment and ideas. The LCID StockTwits forum garners over 450k impressions daily and has a 76% bullish sentiment (On LCID Stocktwits). By looking at some simple figures, we can see that the LCID Stocktwits community (and retail investment community) likes LCID… but is it any good?

Massive Historical Shareholder Dilution for LCID Stock Holders:

After LCID's PIPE share lock-up period expired, LCID stock has went from 1.42B shares outstanding to 1.62B shares outstanding. This increase represents a 14% increase in shares outstanding, in just 4 months. This is not a lot considering LCID is a very new stock on the market, furthermore, the dilution seems to be slowing own quickly.

LCID Stock Financial Position:

Typically, high growth stocks will have high dilution figures, but will have large revenue growth (even if their net income is decreasing). However, their earnings are very bad with their most recent quarterly report stating $230k in revenues, a gross profit of -$3M, an operating income of -$497M, and a net income of -$524M.

Overall, LCID has very high dilution, and has not been growing their revenues at all. This to me sounds like a very easy short (bear) position. However, is there more to this story than I am considering? If so, please let me know in the comments.

Overall Thoughts on LCID Stock:

Overall, I think the best way to profit off of LCID Stock is to go long after you analyze their earnings report. I think that for the next week I would be bearish, however, if there is a big drop after earnings, I think the reward would be greater than the risk (in terms of going long). Alternatively, if their earnings are good, you can analyze it (in detail) to see if an investment is a good long-term decision.

read-time
3 min
29.12
Target Price
6/ 10
Confidence
6-12 Months
Timeframe
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Earnings Release
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News
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SEC
Filing
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Sentiment
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