The media recently reported that Ford will sell 8 million of its shares in Rivian. To no surprise, the startup electric pickup truck maker's shares tumbled in premarket trading following the announcement.
Rivian's share price is currently down over 18 percent in premarket trading after being down some 10 percent when Ford's stock sale announcement was made public. Ford currently owns an impressive 12 percent of Rivian's shares, which equates to about 102 million shares in total.
According to multiple reports, this Sunday, May 8, 2022, marked the expiration of an insider lockup period. The lockup follows the initial share sale that went down in November 2021. During the initial sale, Rivian's market value soared to over $100 billion, though only for a short time. Since then, the situation has been far from positive. As Automotive News notes, for a time, Rivian's stock was more valuable than Ford's and GM's.
As some analysts expected, Rivian's stock tanked when it became apparent that the company won't be able to crank out electric trucks as quickly or in the high volume some investors anticipated. To Rivian's credit, this is essentially the nature of the startup situation, and in the current situation, times are arguably tougher than they have been for years. The COVID-19 pandemic, supply chain issues, and conflict overseas have worked to complicate the financial situation significantly.
Based on the tweet above, which shares information from a related article by CNBC, Ford's Rivian share sale is being taken care of by Goldman Sachs Group Inc. Automotive News also writes that JPMorgan Chase & Co. is planning to sell 13 to 15 million of Rivian shares "for an unknown seller."
Sawyer Merritt says Rivian's stock is down some 84 percent from its all-time high in November 2021. However, it's still unclear if Amazon is making plans to sell any of its shares. Rivian is producing electric delivery trucks for Amazon, though, much like Ford, the online retail company also suffered a massive loss due to its early investment in Rivian.