Rivian (NASDAQ: RIVN) catapulted itself onto Wall Avenue in November final 12 months within the largest IPO of the 12 months. Following a quick flirtation with a valuation of $100 billion, the hype surrounding the California-based automaker appears to have died down.
Its inventory value closed down over 5% yesterday, a development that has seen the corporate plummet by over 30% up to now month alone.
Why is Rivian inventory down?
Yesterday’s value decline is undoubtedly linked to the corporate saying that it had failed to satisfy its car manufacturing targets for 2021. The agency had aimed to fabricate 1,200 electrical autos (EVs) over the course of the 12 months however fell brief by 185 items. Regardless of the corporate anticipating this failure to satisfy targets in its first quarterly replace as a non-public firm – an announcement that noticed a ten% drop in mid-December – buyers couldn’t be stopped from promoting off.
Rivian additionally introduced yesterday that its Chief Working Officer Rod Copes had left the corporate final month in a retirement that was deliberate for months. This very properly might have added to shareholder considerations as the corporate seems to start out ramping up manufacturing.
What does this imply for buyers?
Sadly, a few of the causes Rivian held worth to buyers are being slowly eroded away. The corporate held a definite first-mover benefit within the electrical pickup truck market, however legacy producers at the moment are starting to catch up. Most notably, Ford will start to promote its extremely well-liked electrical F-150 Lightning pickup this Spring.
Rivian additionally suffered closely earlier this month when Stellantis introduced that Amazon would be the first business buyer for its Ram ProMaster EV. Amazon presently owns roughly 20% of Rivian and had beforehand given the automaker a contract for 100,000 autos to be fulfilled by 2030. An Amazon spokesperson was fast to notice that “this doesn’t change something about our funding, collaboration, or order measurement and timing” with Rivian.
Rivian nonetheless maintains some worth to buyers regardless of these vital points. The agency’s first providing, the R1T pickup truck, has been extraordinarily properly acquired by the motoring neighborhood. Plans for a brand new manufacturing facility in Georgia may also enhance total manufacturing when it turns into totally operational in 2024.
It is going to be fascinating to see how the corporate fares all through 2022 as increasingly automakers start to really give attention to the EV market. If it may navigate the following 12 months or two and proceed to extend manufacturing and gross sales, Rivian might properly find yourself being a convincing success. Till this proof is obtainable, nonetheless, I shall be watching the corporate intently versus actively investing.
