Why Rivian Automotive Stock Crashed Monday

What occurred

Rivian Automotive (RIVN -20.88%) stock has been falling all yr, moving into this week down a lot more than 70% year to date. Some of the new fall may possibly have been in anticipation of the expiration of the lockup time period that occurred this weekend. Just after the electric auto (EV) maker’s original public presenting (IPO) on Nov. 10, 2021, early traders have been necessary to maintain onto shares for a period of 180 times. But Rivian shares tumbled now on the initial trading day right after that expiration, down 16.6% as of 10:58 a.m. ET. 

So what

It wasn’t just the lockup expiration that has buyers marketing this morning, however. Above the weekend, CNBC’s David Faber described that Ford will be promoting some of its stake in Rivian. Ford was an early investor in Rivian, holding 102 million shares, or about 11%, in the corporation. Faber reported that Ford has lined up a sale of 8 million on those people shares.

Now what

Rivian shares went general public at a price of $78 for every share and far more than doubled from there shortly just after the IPO. But the inventory closed Friday at just underneath $29. Ford bought the 8 million shares at $26.90 for each share, according to the report. 

Ford reportedly nevertheless manufactured a significant income on the shares it currently marketed, though, and that block of shares only represents about 8% of its holdings. It can be not stunning that Ford desired to increase some hard cash from the financial investment as it is operating to ramp up its very own electric powered automobile creation as it transitions from inside-combustion-run cars and trucks and vehicles. 

The report also recognized yet another block of 13 million to 15 million shares that are staying made available by an mysterious vendor, on the other hand. The information — and flood of new shares on the market place now — has Rivian stock plunging these days.