A Lesson in Stonks: Rivian Nosedives as Ford Unloads Shares

The fortunes of many are won and lost on America’s stock markets – or even on reports of share sales. Markets reacted this morning to a news report alleging Ford Motor Company is divesting itself of 8 million shares in Rivian, the latter being an EV startup with designs on producing the R1T pickup truck and R1S SUV.

In premarket trading, Rivian’s stock fell over 10 percent to just $25 per share, well off its 52-week high of nearly 180 bucks. Yeesh.

It was reported over the weekend that the Blue Oval is eager to shed 8 million shares of Rivian, representing less than a tenth of its 102 million share stake in the EV company. Something called a ‘stock lockup period’ for early investors such as Ford apparently expired on Sunday, leaving the Glass House free to do with its ownership as it sees fit. It’d seem they want out – or at least partially.

For those of you who slept through economics class, an IPO lock-up is a period of days, typically 90 to 180 days, after an initial public offering during which time shares cannot be sold by company insiders and typically apply to entities like company founders and owners but may also include early investors such as venture capitalists. Ford counts itself in the latter group as far as Rivian is concerned.

One can be forgiven for thinking a tie-up between Ford and Rivian is confusing since both companies are producing all-electric pickup trucks and are essentially in competition with one another. Originally, the two entities spoke at length about a partnership with a three-pronged approach to EVs, at least one of which would have seen Ford use Rivian’s so-called ‘skateboard’ chassis in its own vehicles. As we now know, Ford has made like Fleetwood Mac and gone its own way and started producing the F-150 Lightning, a vehicle on which we will have extensive coverage later this week.

As of this writing, $RIVN is trading at $23.95 per share. Its IPO listing price was $78 in November, making it the sixth biggest in U.S. history and the largest of 2021. It more than doubled in value within seven days before settling in around the $100 mark for the rest of the year. It fell below its IPO price about three weeks later and hasn’t come close to it since. Ford’s own stock is currently worth $13.62 per share.

[Image: Rivian]