Bedrock AI is software that uses AI to read securities filings and predict whether a company's stock price would collapse based on its written financial disclosures.
Bedrock AI predicted a price collapse at Lucid Group in November 2021. At this time, $LCID reached all time highs with a price per share over $50.
Since then, Lucid's stock price has plunged to only $8.68 (as of December 12, 2022), a drop greater than 80%. Lucid Group was one of the worst performing stocks in the Russell 2000.
In addition to Lucid Group’s high Bedrock AI Risk Score, we also flagged multiple red flags at the company to our subscribers. Never miss red flags like these again, sign up for a trial https://www.bedrock-ai.com/contact-us.
Red flags Lucid Group $LCID flagged by Bedrock AI during 2021:
Internal control issues:
$LCID had material control weaknesses related to the insufficient complement of personnel and formal accounting policies, procedures and controls resulted in adjustments to several accounts and disclosures.
Related party transactions:
In July 2021, $LCID entered into an agreement with Public Investment Fund (PIF), the parent entity of Ayar, the company's majority stockholder. The agreement was made to implement a recruitment and talent development program. Pursuant to the agreement, $LCID expected to be reimbursed by PIF $1 million in 2022.
Related parties are people and organizations that are affiliated with the company. Millions of dollars worth of related party transactions should be viewed with skepticism as they are between non-independent parties and may be an act of self-dealing.
Legal and regulatory red flags:
On December 3, 2021, $LCID received a subpoena from the SEC.
The company went public via SPAC merger:
Quite a few of these types of companies have experienced issues later in their lives. We wrote about a few here in April. The Bedrock team wrote a Substack back in April 2021, detailing several red flags that many de-SPACs experienced subsequent to their SPAC mergers.
Our Bedrock team also wrote a Twitter thread in November 2021, detailing many red flags at $LCID. We wrote our Twitter thread right at $LCID's stock price peak.
A few of our algorithmic red flags from 2021 (as shown from Bedrock AI's Dashboard):