Shares of electric vehicle startup Rivian have fallen by around 15% in the last two days, hitting a new low after Amazon signed a deal to buy electric vans from rival automaker Stellantis and as investors continue to rotate out of high-growth stocks amid rising interest rates.
After tanking 11% on Wednesday, Rivian’s stock fell another 3% to around $87 per share on Thursday.
Shares of the electric vehicle maker earlier on Thursday briefly dipped below Rivian’s starting IPO price of $78 per share, when the company went public at a $90 billion valuation last November.
Stellantis, formerly known as Fiat Chrysler, first announced the deal to sell its electric Ram ProMaster vans to Amazon starting in 2023.
News of the deal was a major setback for Rivian’s stock: Amazon is its second largest shareholder and its deal to buy 100,000 electric vans from Rivian was a big selling point during the electric vehicle maker’s IPO.
Rivian’s stock drop comes as competition within the electric vehicle industry heats up, as more legacy automakers including Ford, General Motors and many others ramp up investments in the sector.
Shares of electric vehicle companies—along with other high-growth stocks—have so far come under intense pressure in 2022 as investors dump companies with high valuations and uncertain future profitability amid rising interest rates.
The decline in Rivian shares on Thursday came even after a bullish call from Bank of America, which named the company one of its top stock picks for 2022.
Rivian said in a statement that Amazon’s deal with Stellantis was “good news for the industry” because it helps further reduce carbon emissions by using more electric vehicles. “Amazon’s scale is globally unprecedented, and we expect them to purchase vehicles from many providers,” the company said. “Our own partnership with them is intact, thriving and growing.”
Rivian’s stock had initially surged to as much as $179 per share within days of its blockbuster initial public offering last November. With the electric vehicle startup earning a whopping $90 billion valuation, Rivian boasted the biggest U.S. IPO since Facebook in 2012, with numerous investors hoping it can become the next Tesla. The company’s first quarterly earnings as a public company last month, however, signalled that Rivian may struggle to ramp up production and meet high demand for its electric pickups and SUVs. Citing supply chain issues, Rivian was “a few hundred vehicles short” of its 2021 production target of 1,200 vehicles.
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