Rivian Shares Plummet After Ford Dumps 8 Million Shares

Rivian shares continued their downward slide Monday after stockholder Ford Motor Company announced that it is dumping 8 million shares in the Irvine-based electric truckmaker.

Over the weekend, it emerged that the Detroit auto giant plans to reduce its position in Rivian, which totaled 102 million shares, after it was released from a six-month lockup period in the wake of Rivian’s November initial public offering.

In turn, Rivian’s stock started the week’s trading by continuing its months-long decline, shedding another 21% on Monday and retreating ever further from the autumn highs that briefly made it one of the world’s most valuable automakers. The company’s shares closed at $22.78, on a day when the tech-heavy Nasdaq exchange it trades on fell 4.3% amid an ongoing stock market selloff.

To be clear, Ford’s retreat doesn’t mean it is bailing on its Rivian investment entirely; the Detroit automaker still owns 94 million shares in Rivian and, alongside Amazon, remains one of the largest investors in the electric truck and SUV manufacturer. But it does see a major Rivian backer limiting its exposure to the stock in the face of production setbacks and vehicle price hikes brought about by rising costs and supply chain woes.

Despite those setbacks, Rivian announced last week that it had secured $1.5 million in tax incentives to begin construction on a new auto plant in Georgia that is expected to add 400,000 vehicles to its annual production capacity. If the company can achieve anywhere close to that level of production in the next five years, Rivian could finally prove a real rival to Tesla and other EV competitors.

Rivian is set to release its first-quarter earnings report on Wednesday. Should the company’s performance meet or exceed expectations, it could help stem its stock’s downward momentum and calm the nerves of jittery investors; if not, Ford’s decision could be a harbinger of things to come.