R.J. Scaringe, Rivian’s 35-year-old CEO, introduces his firm’s R1T all-electric pickup and all-electric R1S SUV at Los Angeles Auto Present in Los Angeles, California, November 27, 2018.
Mike Blake | Reuters
Amazon invested in electrical car maker Rivian in 2019 as a part of a plan to go inexperienced. Through the first quarter, it noticed nothing however pink.
In its earnings report on Thursday, Amazon took a $7.6 billion loss on its stake in Rivian. Shares of the EV producer plummeted by greater than 50% within the first three months of 2022, reversing course from the fourth quarter, when the corporate held its stock market debut and noticed its worth skyrocket.
Whereas Amazon has massive ambitions for Rivian, signing an settlement for the manufacturing of 100,000 supply automobiles by 2030, present market circumstances are tough. Rivian said last month that the corporate expects to provide simply 25,000 electrical vehicles and SUVs this yr, half of the quantity forecast to traders final yr as a part of its IPO roadshow.
Like most producers, Rivian is battling by provide chain constraints and inner manufacturing snags. However Rivian was valued at $86 billion after its IPO pop, making the inventory significantly susceptible to a significant pullback.
Rivian’s drop in 2022
CNBC
The Nasdaq Composite dropped 9.1% within the first quarter, its worst interval because the first quarter of 2020, when the Covid-19 pandemic was starting. The riskiest bets took the largest hits as traders rotated into property thought-about safer in a interval of rising inflation and rates of interest.
Rivian’s drop has continued into the second quarter, with the inventory plummetting one other 36%. It is now greater than 80% off its excessive from November.
On Wednesday, Ford took a $5.4 billion loss on its 12% stake in Rivian. Amazon has a roughly 18% stake, in accordance with FactSet, investing a complete of greater than $1.3 billion into the corporate.
Amazon’s markdown is especially giant, but it surely’s not the one tech firm that is taking a beating on its fairness investments.
Earlier this week, Alphabet recorded a $1.07 billion loss on its investments “given market volatility.” Alphabet’s funding arms have backed firms together with UiPath, Freshworks, Lyft and Duolingo, which have all gotten caught up available in the market swoon.
Microsoft stated this week that its first–quarter revenue took a $174 million hit partially resulting from “mark-to-market losses on our fairness portfolio.” And final week Snap stated it had a $92 million unrealized loss “on funding that grew to become public in H2 2021.”
WATCH: Rivian’s CEO confident the company can produce 25,000 vehicles this year
