From the most flamboyant IPO to a fall that doesn’t seem to stop, Rivian seems to be accumulating bad news. Ford parted with a large volume of shares, which is not without consequences for Rivian’s share price.
Ford and Amazon form the two main shareholders of Rivian. Except that in one week, Ford has just offloaded 15 million shares representing 400 million dollars. Ford lost money in the operation, but for Rivian, it is above all an additional financial fragility in the eyes of investors. One wonders what could stop the fall of the young manufacturer of electric vehicles.
Rivian had yet started last November with a record when it went public. The new builder, which had yet to deliver anything, had seen its shares drop from $78 at its IPO to $170 in a matter of days. Its valuation had managed to double that of historical groups like Volkswagen or Ford, but the euphoria was only short-lived. Since the end of December, the share price has been falling, production targets are far from being achieved, and the brand is facing major supply difficulties.
Will Ford completely let go of Rivian?
Rivian stock has lost more than 70% of its value since its IPO. It is currently trading around $26.5.
Ford began by selling 8 million shares on Tuesday May 10 for a value of $214 million. Then, on Friday May 13, Ford again put 7 million Rivian shares back on the market for $188.42 million. While $400 million seems like a lot, Ford still has nearly 87 million Rivian shares, according to Reuters.
Ford’s stake amounted to 12% of Rivian before these first share resales. Many questions are raised through these operations. Will Ford continue to separate in packages of a few million shares to liquidate its stake in Rivian, or is the automaker just trying to limit the losses? We will have to follow the next movements on the stock market to be sure.
Ford had invested in the Rivian adventure hoping to share at least one electric vehicle platform. By mutual agreement, the partnership ultimately did not come to fruition. We do not see the interest that Ford can now have to remain as the main shareholder of the young brand, while it is in a period of turbulence.