Ford Motor Co. has decided to continue offloading Rivian stock, with the burgeoning electric vehicle manufacturer at roughly $24 per share. After divesting itself of 8 million shares earlier this month, Blue Oval sold another 7 million ahead of the weekend — leaving itself holding about 9.7 percent of the company.
With 86.9 million shares leftover from the sale, Ford remains a relevant stakeholder. However, investors are growing worried that the legacy manufacturer will continue dumping Rivian as a way of salvaging future losses. Ford, which previously owned some 102 million shares in Rivian, endured a massive $3.1-billion loss in its first quarter as the value of its investment in the company slumped. Worse still, investors are souring on tech and EV stocks in general.
Analysts are torn as to why. Popular suppositions include the general state of the market and the rising costs of commodities that battery production is overwhelmingly reliant on and claims that the influx of shady EV startups has gradually soured investors on their future prospects.
Rivian’s specific problems are no less complicated. Unlike some of its less-than-reputable counterparts, the brand has made real headway in terms of production and received meaningful financial support from the likes of Ford and Amazon. It also recently announced plans to establish a new facility in Georgia to assemble all-electric SUVs. But it endured a $1.59 billion in the first quarter of 2021 and has cut back its previous assertion that it could produce 40,000 vehicles annually to just 25,000.
This puts investors in a bit of a pickle. Rivian still seems to have some solid momentum behind it and may yet rebound after its lofty IPO settles down. However, that assumes that investors still think it’s a good buy at its present valuation and that Ford and Amazon will not continue offloading shares.
[Image: Rivian]
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I bought a modest amount of RIVN when I heard that Ford’s small selloff was killing the stock, and it made me 11% in a week. I could still lose it all.
Perhaps Ford’s move here is more about Ford, and less about Rivian. They won’t be building products together, so it makes more sense for Ford to put this money to use elsewhere.
Rivian’s biggest challenge seems to be a tight supply chain, but there are others common to all startups.
If you bought last week, you’re not getting killed.
I personally would wait until after the midterms before dumping a lot of money into this stock.
Betting on the opposing team is a conflict of interest anyway.
Shady or not but my neighbor just bought black Rivian pickup. So it is real Looks cute in person. Now he has to EVs parked in his driveway – white Model Y and black Rivian. Rivian looks smaller compared to Model Y. I do not think it is a competitor to F150, rather to Maverick.
Is the Rivian the same size as the Maverick?
I’ve seen at least one in the flesh, and believe me, it’s the size of an F-150!
Hard to say if the selloff by F is going to put Rivian on shaky ground. I personally wouldn’t go for one of these right now, since I wouldn’t want to be left with a possible orphan.
Yeah, probably front end design and black color make it to look small. It looks more delicate than F150 though.
Shady or not but my neighbor just bought black Rivian pickup. So it is real. Looks cute in person. Now he has two EVs parked in his driveway – white Model Y and black Rivian. Rivian looks smaller compared to Model Y. I do not think it is a competitor to F150, rather to Maverick.
I would be interested in seeing both the Rivian and the Lighning in person. I was my first Santa Cruz a week ago and then I saw another one yesterday. I pulled up in the Sam’s parking lot to compare my Maverick to the Santa Cruz even the grayish blue was similar but lighter. Nice truck but I prefer my Maverick.
So…Ford’s not dumping the stock altogether, which would probably kill Rivian.
This feels like a message to Rivian over Ford’s 1Q loss, which was entirely due to Rivian losses: get your act together already. We don’t need you to make pickups and we don’t need you for electric Lincolns either.
its still more than what F paid, so wheres the loss?
It was a paper loss from their 1Q earnings. The stock went down in value and they wrote the loss off.
Seems like Tesla sucked up all the speculative EV money and has been able to use their high stock price to finance expansion, and guarantee supply of critical components. Other EV startups are going to struggle raising that kind of capital.
Makes me wonder if Ford’s attitude isn’t along the lines of “Now that the F-150 Lightning is in production, why should we be supporting a competitor? And if we can tank major competition in the process, all the better.” At one time Ford felt it needed Rivian, thus the investment. Now, they’re deciding they don’t.
Trump is bad.
Nobody said it for a while
I piped up
@Art,
This guy here doesn’t like Trump OR Biden:
https://youtu.be/vya8YbN6SnI
Weird.
I am voting for Nancy Reagan’s astrologer and Monica Lewinsky’s dry cleaner
COTD
Yikes!
Ford buys Rivian to collaborate on new trucks/SUVs. Values go up.
Ford then says they won’t collaborate w/ Rivian on new trucks/SUVs. Values go down.
Meanwhile, Ford develops it’s own electric truck and brings it to market in record time.
Ford then sells Rivian stock as a result of stock going down and lack of collaboration. Values go down some more. Ford doesn’t suffer because all those investment losses are tax deductible against record profits.
If Ford continues selling, Rivian values could continue to plummet, submarining Rivian.
Who wants to bet Ford never really intended to collaborate with Rivian on anything – that this is exactly what was planned?
I don’t think its that complex. They were hedging their bets. As it turns out the Mach-E was pretty successful and they had no real issues getting the Lightning to market. As their own EV portfolio is now more mature than Rivian’s, they no longer have need of them.
As a day-two reservation holder on a Lightning, as well as a direct line to Ford Fleet staff due to our annual purchase with them, I can tell you that their version of “Lightning to market” is overstated. These things are going to be trickling off the assembly line for the next year.
Meanwhile Rivian is able to sell me 13 trucks in a 1-month time span.
funny, because rivian isnt going to be able to meet amazons demand. theyll take your money no prob.
Tesla did the same – as has Lucid and Ford (Bronco anyone?) and others who introduce a vehicle, accept deposits, then sit on the money until they eventually get around to delivering cars.
Nothing new here.