Key points:
- The Rivian lockup after the IPO ended on Sunday
- Gossip over the weekend was that up to 23 million Rivian stock might be offered
- These would come from Ford and one other, unnamed, holder
- Ford (F) First-Mover Status Warrants Your EV Pick
Rivian (NASDAQ: RIVN) stock has suffered from the same problem that everyone else in the EV space has had – they’re not Tesla (NASDAQ: TSLA). The IPO back in November was at a massive valuation, given the excitement over Tesla’s performance, Rivian rose from $100 to $170 but has since fallen all the way back to $26 and change.
This is a fairly classic stock price movement for someone in a hugely fashionable field – fashion boosts then people start to take a more measured view of actual performance and operating numbers. It’s also what has been happening to near all the non-Tesla competitors in this EV market. It’s not, not particularly at least, that Tesla is obviously going to win it all, it’s rather a reversion to sensible judgment from the previous absurd boosterism of those competitors.
However, that the IPO was last November means that the lock-up period ends at some point. In fact, it was yesterday, Sunday. This means that those holders of large blocks of stock who were previously banned from selling can now sell. Which leads to the gossip over the weekend. Well, it’s better source than gossip but it’s not, until there’s a proper announcement, wholly and fully known.
Also Read: These Are The 3 EV Stocks You Need In Your 2022 Portfolio
The tale is that Ford will drop some 8 million of its Rivian stake (the total stake is some 102 million shares). Given that Ford just booked a $3 billion and change loss this will be a useful boost for its accounts. Sources say that these shares will be sold through Goldman Sachs.
There’s also another seller out there. JP Morgan Chase is said to be handling the sale of 13 to 15 million shares for an unknown holder.
Rivian fell 6% on Friday as the story started to spread and there’s been another 7% fall premarket this morning. For 23 million is a fair old chunk of Rivian stock for the market to try and absorb in the one day.
Which brings us to the technical analysis here. Leave aside the longer-term valuation of Rivian for we have a specific short-term price movement here. The desired price for that stock that is to come to market is said to be $26.90. Which is going to be difficult to achieve as the current ticker – after the two 6 and 7% falls – is only $26.78. Coming to market and trying to place 23 million in stock at above Rivian’s current price is going to be, shall we say, technically challenging.
What’s likely to move the Rivian stock price further is how that placing goes. If Ford and the unnamed other go ahead and dump at any achievable price then that will be short-term negative. Which could then be viewed as an opportunity to buy into the Rivian story cheap or, well, it could be seen as if they don’t believe it then why should we?
