Ford Motor Co. has decided to continue offloading shares of Rivian, the booming electric vehicle maker at around $24 per share. After divesting itself of 8 million shares earlier this month, Blue Oval sold a further 7 million before the weekend, leaving itself to own around 9.7% of the company.
With 86.9 million shares remaining from the sale, Ford remains a relevant player. However, there are growing concerns among investors that the former manufacturer will continue to dump Rivian in order to recoup future losses. Ford, which previously held some 102 million shares in Rivian, suffered a massive $3.1 billion loss in the first quarter as the value of its investment in the company plummeted. Worse still, investors are turning to tech and electrical stocks in general.
Analysts don’t know why. Popular guesses include the general state of the market and rising commodity costs on which battery production largely depends and claim that the influx of shady electric vehicle startups has gradually soured investors on their outlook for the future. coming.
Rivian’s specific issues are no less complicated. Unlike some of its lesser known counterparts, the brand has made real progress in terms of production and has received significant financial support from Ford and Amazon. It also recently announced plans to set up a new plant in Georgia to assemble all-electric SUVs. But it endured $1.59 billion in the first quarter of 2021 and reduced its previous claim that it could produce 40,000 vehicles a year to just 25,000.
This puts investors in a bit of trouble. Rivian still appears to have strong momentum behind it and could rebound further after the end of its IPO. However, that assumes investors still think it’s a good buy at its current valuation and that Ford and Amazon won’t continue to offload stocks.
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