Rivian Is Down By 15%, Here Is Why

Key Insights

• CNBC reported that Ford decided to sell 8 million Rivian shares. 
• The report also indicated that another investor was willing to sell 13 million – 15 million shares. 
• Rivian’s market capitalization exceeds $20 billion despite the huge pullback from all-time highs. 

Rivian Stock Falls As Ford Is Selling 8 Million Shares

Shares of Rivian gained strong downside momentum after a CNBC report indicated that Ford  would sell 8 million Rivian shares. The shares would be sold through Goldman Sachs. In addition, the report indicated that an unknown seller would be selling 13 million – 15 million Rivian shares through JPMorgan.

Ford owns 102 million shares of Rivian, so the automaker decided to sell about 8% of its current stake in the EV company. Rivian stock had a great debut in late 2021 and touched highs near the $180 level but lost momentum and has been declining for months.

Not surprisingly, traders rushed to sell Rivian stock after the CNBC report was released. The general bearish market sentiment added to pressure, and the stock moved below the $25 level.

What’s Next For Rivian Stock?

The current market environment is bearish for stocks like Rivian. The company is not expected to become profitable anytime soon, while the market is focused on finding safe-haven plays in the rising interest rate environment. In addition, analyst estimates for Rivian have been declining in recent months.

Ford’s decision will certainly serve as a major red flag for many investors, and the stock could remain under strong pressure in the upcoming trading sessions. The CNBC report indicated that Ford was not the only company that was willing to sell shares, which will increase traders’ concerns.

It should be noted that Rivian is valued at more than $22 billion even after the huge pullback. The company has not reached mass production levels, and it remains to be seen whether the market is willing to support such enterprises in the current environment. While the pullback from $180 to $25 may look like a great opportunity to buy Rivian stock, traders must stay cautious as Rivian remains a richly valued company.

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