Rivian Stock Rebounds

After a rough week marked by disappointing earnings, Rivian Automotive Inc. saw its shares rise on Monday following a significant selloff.

High-Profile Investors Feeling the Pinch

Notably, Amazon.com Inc. remains Rivian’s largest shareholder, holding approximately 158.4 million shares, accounting for 16.6% of the total outstanding shares. The recent stock drop led to a nearly $986.6 million decline in the value of Amazon’s investment.

Ford Motor Co. Takes a Hit

Ford Motor Co., which still holds around 10.5 million shares of Rivian, faced losses of approximately $65.4 million last week alone. Year-to-date, these losses have amounted to about $137.4 million for the automotive giant.

Changes in Partnership

Having terminated its exclusive deal with Amazon for electric delivery vans in November 2023, Rivian is navigating shifting dynamics in the market.

Market Response

Despite these challenges, Rivian’s stock managed to bounce back with a 3.1% gain in Monday morning trading, following a record low closing price of $10.07 on Friday. The recent 38.2% decline marked a notable downturn, exceeding previous weekly dips.

Analyst Downgrades Rivian’s Stock Amid Capital Needs Concerns

Truist’s Jordan Levy became the latest analyst to shift their stance on Rivian’s stock, downgrading it to hold on Monday. The price target was cut by a significant 58%, now sitting at $11 from the previous $26.

Factors Behind the Downgrade

Levy highlighted the company’s “strong execution” and expressed optimism about Rivian’s brand value. However, he pointed out the looming “imminent capital needs” which are expected to weigh on the stock. The upcoming plant shutdown is also seen as a factor contributing to this cautious outlook.

Mixed Sentiment Among Analysts

Following Rivian’s wider-than-expected fourth-quarter loss announcement and a disappointing 2024 production outlook, several analysts have revised their opinions. Out of the 28 analysts covering Rivian, four have downgraded the stock. However, the majority remain bullish with 15 analysts, while nine are neutral and four hold a bearish view.

Stock Performance and Valuation

After going public in November 2021 with a valuation of around $77 billion, Rivian’s market capitalization currently stands at about $9.9 billion. The stock has experienced a significant decline of 55.8% year-to-date, contrasted with the Global X Autonomous & Electric Vehicles ETF DRIV dropping by 3.9% and the S&P 500 index SPX gaining 6.8%.