Lucid Group is caught in an unusual divergence: the cost to borrow has more than halved again this week, yet the stock has shed another 14% — a reminder that cheaper borrow does not equal a friendlier tape.
The decompression in borrowing costs is now the dominant trend in the lending market. Cost to borrow dropped to 22.4% by Tuesday, down from 30.3% a week ago and a fraction of the mid-July peak above 310%. That is real progress for shorts who survived the squeeze. The availability picture, however, remains almost comically tight. Despite the cost decline, the lending pool contains barely 1.2% availability — roughly one share on offer for every 83 already lent out. That figure has fluctuated between near-zero and 7% for the past six weeks without ever truly opening up. Borrowing costs are falling not because supply has returned, but because demand from new shorts has eased alongside the stock's decline. Short interest itself ticked up 1.6% on the week to 56.1 million shares, equal to 17.3% of the free float — still well below the mid-July peak of 66 million shares, but no longer falling. The slow unwind that characterised July has stalled.
Options traders are the most bearish they have been in weeks. The put/call ratio climbed to 1.63, nearly two standard deviations above its 20-day average of 1.45 — the most defensive reading on the options market in the past month. That compares with a PCR around 1.18 in mid-July when the stock was at higher levels. The combination of elevated short interest and skewed options positioning suggests investors are not just riding the downtrend — they are actively hedging against further losses.
The Street is losing conviction on the upside, but not uniformly. Citigroup's Michael Ward cut his price target to $11 from $14 on Tuesday, yet maintained a Buy rating — a signal the firm still sees material upside from the current $5.77 price, even as the target compresses. RBC Capital trimmed to $7 in mid-July, and the broader analyst cohort has been in target-reduction mode since spring. The mean price target of $7.90 implies roughly 37% upside from here, but the trajectory of that target has been consistently downward. The bull case rests on the Gravity SUV launch, medium-term gross margin improvement, and longer-term autonomous vehicle optionality. The bear case is more immediate: suspended 2026 guidance, weak delivery conversion, and a balance sheet that keeps requiring external support. The ORTEX short score of 81.0 places Lucid in the bottom 1% of all stocks by short-side factor ranking — the most bearish composite reading the model generates.
The ownership structure adds one genuinely unusual layer. Saudi Arabia's Public Investment Fund holds 44.9% of the company. Uber Technologies appeared as the second-largest holder with a 9.6% stake as of June 30, having added 24 million shares in the quarter — a notable strategic position worth watching for any commercial rationale. Beyond those two anchors, passive money from BlackRock, State Street, and Vanguard has been building modestly. The insider picture is less interesting: all recent insider transactions have been small, low-significance sells, with the net 90-day value under $203,000. The Acting CEO and CFO both sold at $5.68 in June — at prices not far from where the stock trades today.
The next earnings event is scheduled for November 6. The recent print on August 5 produced a 10% one-day drop and a 16% five-day loss — the pattern of violent post-earnings declines is well established. With cost to borrow still elevated at 22%, the lending pool near empty, short interest rebuilding at the margin, and RIVN down 10% on the week alongside Lucid, the question heading into autumn is whether the delivery trajectory for the Gravity can produce any upside surprise — or whether another guidance miss extends the pressure further.
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