In its first trading day since it executed a reverse stock split after hours on Friday, Lucid Group (LCID -9.32%) stock was heading lower today as investors seemed to absorb the reality of that move this morning. The broader sell-off in the market, which may be related to uncertainty around interest rate cuts later this month, also likely pushed the electric vehicle (EV) stock lower.

As of 10:11 a.m. ET, the stock was down 4.6%.

Image source: Lucid.

Lucid goes in reverse

On Aug. 21, Lucid announced that it would execute a 1-for-10 reverse stock split, which was approved at a special stockholder meeting on Aug. 18. The stock pulled back 3% on Aug. 22 after that announcement.

The move reduced shares outstanding from 3.07 billion to 307.3 million, and seemed designed to lift the stock out of penny stock range as it had been trading below $5 a share since 2023.

Companies sometimes execute reverse stock splits to stay in compliance with stock exchange standards, though this doesn't seem to have directly impacted Lucid's decision, as the Nasdaq Stock Market typically requires listed stocks to trade above $1 a share.

What's next for Lucid

In a challenging market for electric vehicles, Lucid has struggled to ramp up production and is still a long way from profitability. While its high-end vehicles have received a number of accolades, the company reported a generally accepted accounting principles (GAAP) operating loss of $803 million in the second quarter on just $259.4 million in revenue, showing the business is a long way from viability.

Ultimately, investors are better off focusing on the underlying performance of the business rather than the reverse stock split, which doesn't directly affect the company's fundamentals.