Amazon lost nearly $1bn on its Rivian investment last week

Shares of Rivian Automotive Inc. rose Monday, but only after it just suffered its worst week since going public, in the wake of the electric-vehicle maker’s disappointing earnings report. That selloff has been pretty painful to some high-profile corporate investors in the company. Amazon.com Inc. is Rivian’s largest shareholder with a stake of about 158.4 million shares, or 16.6% of the shares outstanding. Last week’s selloff in Rivian’s stock lowered the value of Amazon’s investment by $986.6 million. And the stock’s 55.8% drop year to date has shaved about $2.05 billion off the value of Amazon’s investment. In November 2023, Rivian had ended its exclusivity deal with Amazon to provide electric, last-mile delivery vans.

Meanwhile, Ford Motor Co., which still owns about 10.5 million shares of Rivian, lost about $65.4 million on its investment last week, and has lost about $136.2 million year to date. Ford had originally bought 101.95 million shares of Rivian, or an 11.4% stake, in 2021, but then disclosed a year ago that it lowered that stake to 1.15%. Rivian’s stock rallied 4.1% in morning trading Monday, after closing Friday at a record low of $10.07. The 38.2% plunge last week surpassed the previous record for a weekly decline of 25.3% for the week ending March 4, 2022. Truist’s Jordan Levy became the latest analyst to pull their bullish call on Rivian’s stock, as he downgraded it to hold on Monday. He slashed his price target by 58%, to $11 from $26.

Levy touted the company’s “strong execution” and said he remains upbeat on the value of Rivian’s brand, but said he sees “imminent capital needs continuing to put a ceiling on shares” as the company enters and extended plant shutdown. Rivian had reported last Wednesday a wider-than-expected fourth-quarter loss and provided a 2024 production outlook that was well below forecasts, as Truist’s Levy said the effect of the planned shutdown of manufacturing to upgrade production will be “worse than anticipated.” The company said last week that it expects 2024 capital expenditures of $1.75 billion, due to additional investments in production facilities, next-generation technologies and the build out of operations. The company ended 2023 with $9.4 billion in cash, cash equivalents and short-term investments.

No less than four of the 28 analysts surveyed by FactSet who cover Rivian have downgraded the stock since the quarterly results. But the majority, or 15 analysts, remain bullish, while nine are neutral and four are bearish. Rivian’s stock went public in November 2021, at a valuation of about $77 billion. The company’s market capitalisation at current stock prices was about $9.9 billion. Rivian’s stock has plunged 55.3% year to date, while the Global X Autonomous & Electric Vehicles ETF DRIV has shed 4% and the S&P 500 index has gained 6.6%. MarketWatch