Ford Continues Selling Rivian Stake

ford continues selling rivian stake

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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  • Art Vandelay Art Vandelay on May 17, 2022

    Trump is bad. Nobody said it for a while I piped up

  • BEPLA BEPLA on May 17, 2022

    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?

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    • BEPLA BEPLA on May 17, 2022

      @SoCalMikester 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.

  • 285exp I am quite sure that it is a complete coincidence that they have announced a $7k price increase the same week that the current administration has passed legislation extending the $7k tax credit that was set to expire. Yep, not at all related.
  • Syke Is it possible to switch the pure EV drive on and off? Given the wonderful throttle response of an EV, I could see the desirability of this for a serious off-roader. Run straight ICE to get to your off-roading site, switch over the EV drive during the off-road section, then back to ICE for the road trip back home.
  • ToolGuy Historical Perspective Moment:• First-gen Bronco debuted in MY1966• OJ Simpson Bronco chase was in 1994• 1966 to 1994 = 28 years• 1994 to now = 28 yearsFeel old yet?
  • Ronnie Schreiber From where is all that electricity needed to power an EV transportation system going to come? Ironically, the only EV evangelist that I know of who even mentions the fragile nature of our electrical grid is Elon Musk. None of the politicians pushing EVs go anywhere near it, well, unless they are advocating for unreliable renewables like wind and solar.
  • FreedMike I just don’t see the market here - I think about 1.2% of Jeep drivers are going to be sold on the fuel cost savings here. And the fuel cost savings are pretty minimal, per the EPA: https://www.fueleconomy.gov/feg/PowerSearch.do?action=noform&path=1&year1=2022&year2=2022&make=Jeep&baseModel=Wrangler&srchtyp=ymm&pageno=1&rowLimit=50Annual fuel costs for this vehicle are $2200 and $2750 for the equivalent base turbo-four model. I don’t get it.
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