Rivian Automotive Stocks Lose Nearly Half

Rivian Automotive Stocks Lose Nearly Half

Electrical car producer Rivian Automotive (RIVN -1.02%) is scaling again its ambitions as we enter what may very well be a troublesome patch for automakers. Traders are apparently getting nervous: They despatched Rivian shares down by 42.5% in December, in accordance with information supplied by S&P International Market Intelligence.

Rivian joined the general public markets in November 2021 to nice fanfare, with its share worth surging by as a lot as 53% following its preliminary public providing and valuing the electrical car producer to a market cap of greater than $100 billion. The expectations baked right into a valuation like that, nevertheless, could be laborious to satisfy, and the corporate has since then confronted a number of challenges that tempered buyers’ enthusiasm for the inventory.

Manufacturing automobiles at scale is troublesome and dear. Rivian final yr raised the costs on its well-received electrical pickup, and in September introduced it might work with Mercedes-Benz Group to collectively manufacture electrical supply vans as an alternative of going it alone.

Then in December, Rivian scaled again its expectations additional: It put the partnership with Mercedes on maintain to preserve capital to be used in different areas of its enterprise. The announcement got here at a time when a spread of auto retailers, together with CarMax, had been warning that buyers are more and more going through affordability challenges that would restrict the gross sales of high-end automobiles.

In a weak marketplace for development shares usually, Rivian’s company-specific information despatched buyers racing for the sidelines.

Within the wake of the December decline, Rivian shares at the moment are 83% beneath the worth the place they debuted simply over a yr in the past. Traders who had been as soon as intrigued by the potential of the corporate at the moment are very a lot in wait-and-see mode, and it may very well be some time earlier than a catalyst emerges to get the inventory charging larger once more.

Rivian has a wholesome order e-book, and there is clear demand for its supply automobiles from Amazon (a Rivian investor) and others. The corporate is ramping up manufacturing and dealing by a number of the provide chain points that held again gross sales in 2022. However we face an unsure financial local weather, and a number of automakers are more and more including electrical automobiles to their choices in what’s changing into a crowded market.

It is method too quickly to name Rivian a failure, however after a roller-coaster 2022, it seems many buyers are content material to attend to see what the long run brings earlier than shopping for the shares, even at their present low costs.

Do you have to make investments $1,000 in Rivian Automotive proper now?
Earlier than you think about Rivian Automotive, you will need to hear this.

The Motley Idiot Inventory Advisor analyst crew simply revealed their 10 Greatest Buys Now… and Rivian Automotive wasn’t one in every of them.

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