Why Lucid Stock Jumped, Then Dropped Today

Shares of luxury electric vehicle (EV) maker Lucid Group (NASDAQ: LCID) jumped as much as 6.7% to open the holiday-shortened trading week. That came after the largest public pension fund in the country released news on its Lucid holdings.

But the pop in Lucid stock didn't hold. Shares of the EV start-up lost all of that gain and more. As of 12:15 p.m. ET, the stock had shed 3.1% in today's session.

Calpers adds Lucid shares

In its latest Form 13F filed with the Securities and Exchange Commission (SEC), the California Public Employees' Retirement System reported that it added more than 250,000 Lucid shares. It ended the second quarter with over 1.3 million shares worth about $5 million. Calpers, as it is known, is the largest public pension fund in the country with over 2 million members and assets recently worth about $520 billion.

Lucid shares have been on the rise since the end of the second quarter after it reported better-than-expected revenue and a new $1.5 billion investment from its largest shareholder. But the Calpers investment is still not an overly meaningful holding for the giant fund. By comparison, Calpers sold 14 million shares of tech giant Nvidia in the second quarter, but still held 63 million shares recently worth about $7 billion.

The size of the investment is likely why Lucid shares gave up the early gains today. The company still has a long road to try and achieve profitability. It will launch its first new model later this year that will have to gain traction with customers for the company to succeed. The all-electric Lucid Gravity SUV will be the first new model since its Air luxury electric sedan. The Gravity launch is what investors will need to watch to see where the stock could head from here.

Howard Smith has positions in Lucid Group and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy .