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.
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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