Rivian shares sink to lowest level amid sell-off
US electric vehicle maker Rivian saw its shares decline 21% on Monday to an all-time low following the end of its IPO lock-up period on Sunday and a reported divestment from Ford.
The start-up closed trading on 10 May at $22.78/share – which is a decline of 86.75% from its record share price of $172.01 on 16 November. The carmaker has been struggling to maintain the high valuation achieved in its IPO in November, with stock falling 77.16% so far this year.
On Tuesday, shares opened 4.78%, or $1.09 higher, leading to a market capitalisation of $21.12 billion, Kallanish reports. The carmaker, which hasn’t commented on the stock collapse, will report its Q1 financial results on 11 May.
According to media reports, Rivian faced a sell-off from Ford of 8 million shares since Sunday, while JPMorgan Chase is said to be selling 13-15m shares for an unknown seller. This is the first time company insiders and early investors had the chance to unload shares in the start-up following its IPO. The sell-off reportedly enabled individual investors to buy $22m in Rivian shares.
Ford, which by 27 April owned 102m shares or an 11.4% stake in Rivian, told Kallanish it won’t comment on the matter. The legacy carmaker had earlier confirmed it wouldn’t collaborate with Rivian as originally planned.
Other major Rivian shareholders include Amazon with an 18.1% stake (roughly 162m shares), funds advised by T. Rowe Price Associates with an 18.2% share (162m shares) and Global Oryx Company with a 12.7% interest (114m shares).
Thanks for your question, Patrick. Ford later said it was “prudent at this point to monetise a small portion of the investment” it made in Rivian in 2019. This was the first time after the IPO Ford and some other shareholders could sell some shares. Ford sold 8 million shares at $26.80 each according to a SEC filling. The companies announced last year they would no longer pursue an EV collaboration and sharing of platform as initially planned. Ford is now investing heavy in its own electrification strategy, although it still holds around 94 million shares in Rivian. It’s unclear whether the legacy carmaker will maintain its investment in the EV start-up or divest fully. Rivian’s main task following a super valuation in November is to ramp-up production fast. Hope this helps.
Any thoughts as to the reason for the sell off , when so many other EV manufacturers seem to be doing well?
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