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Rivian drops 21% as Ford sells stake; Can RIVN rebound after today’s earnings?

Rivian drops 21% as Ford sells stake; Can RIVN rebound after today's earnings?
Dino Kurbegovic

Ford Motor Company (NYSE: F) announced yesterday, May 10 through an SEC filing that they had sold 8 million shares of Rivian (NASDAQ: RIVN) on May 9. Following the news RIVN shares tumbled throughout the trading session on Monday, May 9 by 21%.

In yesterday’s trading sessions the shares lost 11% throughout the day, managing to pare back the gains the stock finished down ‘only’ 4.7%.

Ford owned around 102 million shares of the electric vehicle (EV) company buying a stake before the company went public through an Initial Public Offering (IPO) in November 2021.

RIVN IPO was the sixth-largest in U.S. history generating roughly $13 billion, which means that the company is well funded, despite Ford shedding a piece of its stake.

Will others follow suit?

Furthermore, the insider lockup period for the sale of Rivian shares has expired, which has led to this move by Ford. Amazon (NASDAQ: AMZN), which has had its own share of issues recently, owns a 17.7% stake in RIVN and there are also speculations that they too might sell a piece of their stake. 

Ford managed to sell the shares for $26.80 apiece as per the filing, netting roughly $214 million. Based on the initial acquisition of shares, we can calculate that they still own 94 million shares of Rivian stock. 

While supply chain crises affected EV stocks across the board, the rise in material costs, as well as Ford promoting their F-150 Lightning electric pickup truck, the sale of RIVN shares, makes more sense.   

More recently Rivian CEO, RJ Scaringe, stated that he expects the company to produce 25,000 electric trucks and SUVs. With Q1 2022 earnings release coming after market close today, May 11, market participants will keep an eye on statements related to Ford’s sale of RIVN shares.      

Additionally, attention will be paid to any financing issues and supply chain bottlenecks that could further dampen the company’s ability to deliver on its EV promises for 2022. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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