Lucid Group's (NASDAQ:LCID) stock took a hard hit on Thursday, dropping more than 15% after the company announced a major public offering of 262 million shares and revealed deeper-than-expected third-quarter losses. Investors are concerned about dilution, as this move aims to raise $1.7 billion to keep the company afloat. Saudi Arabia's Public Investment Fund, Lucid's largest shareholder, isn't sitting this one out, either. They're stepping in with a 375 million share purchase to maintain their dominant stake, but the market isn't exactly thrilled about it.

• Warning! GuruFocus has detected 6 Warning Signs with LCID.

Lucid's cash burn is accelerating. With $4 billion in reserves, the company is on track to burn through $2.3 billion over the next 18 months. Sure, they've got cash to last until the end of 2025, but waiting until you're down to your last dollars to raise more? That's a risky play no one wants to see. Add in the fact that their Q3 losses are set to exceed $765 millionwell above analyst expectationsand it's clear Lucid's road to profitability is getting bumpier.

To make matters worse, the electric vehicle market is cooling. Competitors like Tesla are cutting prices, making it harder for Lucid to keep pace, even as they hit a new record with 2,781 deliveries in Q3. The stock has already dropped 30% this year, and with no clear turnaround in sight, investors are left wondering if this latest round of funding will be enough to spark demand and keep Lucid in the game.

This article first appeared on GuruFocus.