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Lucid stock fell nearly 6% in premarket trading as Morgan Stanley said ‘sell’.

Lucid went public via the SPAC route at the end of July, and the company’s CEO is Peter Rawlinson, a former chief engineer at Tesla. Lucid caters to the luxury EV market and last week confirmed that the first customer delivery of the Lucid Air Dream Edition would take place on Saturday, October 30th. This amounts to an “important milestone,” said Morgan Stanley’s Adam Jonas.

Investors certainly agreed. Shares soared ~30% on the back of a huge spike in trading volume and the session closed with Lucid boasting a market cap around $62 billion, almost 90% of Ford’s market cap.

Jonas has an idea where all that exuberant volume came from.

“Our trading contacts believe that the trading volume is dominated by retail rather than institutional and is more outright share buying skewed rather than option skewed,” the 5-star analyst said.

Jonas sent an email to clients to get their thoughts on what was behind the “strong price action.” Apart from the good news re the first deliveries, responses included the potential to grow faster than Tesla to “nice looking car,” to the actual deliveries confirming the company is more than just “vaporware.” Tellingly, one reply was: “If you really think that TSLA is worth $1trn then LCID can be worth $65bn.”

Jonas disagrees. The analyst thinks shares are significantly overvalued at current levels and rates LCID as Underweight (i.e. Sell), backed by a $12 price target. This figure suggests shares will lose a huge 67% of their value over the next 12 months.