Will the split change Lucid's eligibility for index inclusion or affect fund managers' ability to hold the stock?

Answer

A reverse‑stock split is a purely mechanical change – the same economic ownership is retained, only the number of shares and the price per share are altered. Index committees (e.g., S&P, MSCI, Russell) evaluate eligibility on the basis of market‑capitalisation, float, and liquidity, not on the absolute share count. Lucid’s split will raise the post‑split price, which may actually improve its standing with any index that still considers the company “too low‑priced” for inclusion, but the company’s market‑cap and free‑float will remain essentially unchanged. Consequently, the split itself is unlikely to remove Lucid from existing indices nor to create a new barrier to entry.

For fund managers, the operational impact is limited to a housekeeping adjustment: the number of shares held in portfolios will be reduced in line with the split ratio, and the per‑share cost basis will be restated. There is no regulatory or compliance restriction that prevents managers from continuing to own Lucid after the split, and most institutional‑style funds will simply update their holdings records. The real trading consideration is the short‑term price reaction that often accompanies reverse splits—historically a modest‑to‑moderate dip as some investors interpret the move as a “price‑boost” tactic.

Actionable take‑away:

- Index exposure: Expect no immediate change in index eligibility; monitor any index committee updates if Lucid is near a threshold (e.g., float‑adjusted market‑cap) but the split alone is not a catalyst.

- Portfolio handling: Ensure holdings are rebased to the new share count; no need to liquidate or re‑allocate unless the post‑split price moves the stock out of a fund’s price‑range mandate.

- Trade‑side: Anticipate a modest, short‑lived price adjustment around the September 2, 2025 effective date. If you are long, consider tightening stops or scaling in after the split‑adjusted price stabilises; if you are short, the same volatility can be used for a quick scalp. Overall, the split does not materially affect Lucid’s eligibility for index inclusion nor restrict fund managers from holding the stock.