Ford Expecting $8.2 Billion Gain On Rivian Investment Following IPO

Ford's 12% stake in Rivian was valued at more than $10 billion in early December following the startup's IPO.

By: Dan Mihalascu

Jan 19, 2022 at 12:55pm ET

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Ford Motor Company’s decision to invest in EV startup Rivian is paying off big time as the latter company’s IPO has resulted in gains of $8.2 billion for the Blue Oval.

In a statement issued January 18, Ford outlined several large special items that it intends to report on February 3 as part of its fourth-quarter and full-year 2021 financial results.

The biggest one is expected to be a fourth-quarter gain of $8.2 billion on Ford’s equity investment in Rivian, following the EV startup’s November 10, 2021, initial public offering of common stock and a mark-to-market revaluation of the holdings.

Ford has invested a total of $1.2 billion in Rivian since early 2019 and currently owns a 12% stake in the EV maker valued at more than $10 billion in early December.

Rivian CEO RJ Scaringe and Ford Motor Company chairman Bill Ford

In addition to the $8.2 billion gain from the Rivian IPO, Ford also said it will reclassify a non-cash gain of about $900 million on the Rivian investment from Q1 2021 as a special item, something Ford said in October it would do after Rivian’s IPO. This means the gain will be excluded from the full-year adjusted results.

Going forward, the Dearborn, Michigan-based automaker said Rivian stock price-related gains or losses each quarter will be reported as special items.

These disclosures show that Ford continues to gain from its connection to the EV startup even after it exited Rivian’s board in September and later announced it would no longer develop an electric vehicle with the Irvine, California-based company.

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Following its IPO, which was the largest of 2021, Rivian saw its market cap briefly exceed $100 billion when shares peaked at more than $172. Since then, they have fallen 57% in the face of new competition in the electric vehicle market.

For a short time, Rivian’s market cap was higher than Ford’s, although the auto giant subsequently reclaimed the lead, topping $100 billion in value for the first time last week.