So long, CFO
Electric-car company Lucid Group made an unexpected announcement today, revealing the immediate resignation of its chief financial officer, Sherry House.
Lucid attempted to present the departure in a positive light, quoting Ms. House expressing confidence in the company’s future. CEO Peter Rawlinson emphasized House’s contributions to Lucid, including the successful public listing, production and delivery of the Lucid Air, and the recent unveiling of Lucid Gravity. He suggested that House’s departure is a natural conclusion following these achievements.
The company stated that House will provide advisory support until December 31, 2023, while Gagan Dhingra, the Principal Accounting Officer, will serve as interim CFO.
However, the transition period of only 19 days raises questions about the suddenness of the departure. Additionally, the vagueness of the reason cited, “pursuing other opportunities,” contrasts with the assurance of continued collaboration during the transition. It seems apparent that Lucid was unprepared for House’s departure, and no immediate replacement has been named.
Is Lucid stock a sell?
Aside from the CFO’s resignation, Lucid’s financial situation, for which House was responsible, raises concerns.
The electric-car company has never achieved profitability and remains in a loss-making position. Over the past year, Lucid reported a staggering loss of $2.6 billion. Moreover, its negative free cash flow amounted to $3.6 billion during the same period.
Furthermore, Lucid recently revised its production guidance for the second time this year, lowering it to a range of 8,000 to 8,500 vehicles. This adjustment was made in an effort to align production with actual deliveries, indicating a potential decline in demand for Lucid’s electric vehicles.
These financial challenges suggest a less than optimistic outlook for Lucid. The CFO’s sudden departure may be an indication of the company’s difficulties.