Al Root
The stock market is supposed to be an efficient integrator of all available information.
It might be in the long run. In the short run, anything can happen.
Take Lucid. Shares of the electric vehicle maker were up almost 10% in early trading Tuesday at $7.40, while the S&P 500 and Dow Jones Industrial Average were up 0.1% and 0.6%, respectively.
The move seems to have been catalyzed by the disclosure that Uber held 37.8 million shares of the electric vehicle maker. (Lucid has about 350 million shares outstanding, a majority owned by entities connected to the Saudi government.)
The investment in Lucid by a strong partner such as Uber, which plans to use Lucid vehicles as robo-taxis in its ride-hailing network, is good news.
It was just already news.
Uber announced a $300 million investment in Lucid in July 2025 and an additional $200 million investment earlier this month.
Nothing changed. Of course, the latest investment close and Lucid has the money, but the deal falling apart was never expected. Lucid stock was north of $30 when the July investment was announced. It's much lower now.
Investors continue to be worried about slowing EV sales after the federal EV purchase tax credit expired in September. U.S. sales of all-electric cars fell 27% year over year in the first quarter, and accounted for less than 6% of total new car sales. EVs accounted for more than 10% of sales in the third quarter, with buyers looking to beat the expiration of the tax credit.
Tuesday's early trading is a reminder that the stock market doesn't always make sense. Another example: Avis Budget Group. Shares are up another 8% at almost $660 a piece. They were below $110 a month ago.
An epic short squeeze, with bearish investors forced to cover bearish bets, appears to be partly responsible for the gains. Short squeezes can happen, but this one has left Avis stock trading for 111 times earnings expected over the coming 12 months. That's an extreme multiple for a car rental franchise.
Investors might want to be careful with both stocks. For Avis, the average analyst price target for Avis stock is $106. One out of nine analysts rate shares Buy.
Two of 14 analysts rate Lucid shares Buy. The average analyst price target is about $13. At least that's higher than where the stock is trading.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 21, 2026 10:50 ET (14:50 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments