CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Rivian (RIVN) stock falls below $100 for the first time

By Monte Stewart


Updated

A Rivian pickup truck
Stock price for electric truckmaker Rivian fell on Friday - Photo: Shutterstock

Rivian (RIVN) stock hit a new low Friday morning as it sank about 15% one day after the company anounced that 2021 vehicle production will be lower than expected.

The stock fell below $100 for the first time since the company went public on an IPO that raised $11.9bn (£8.98bn) in November. Shares were trading at about $97.75 mid-day on Friday.

With Friday’s price plunge, Rivian’s stock continued a roller coaster ride. The price had moved up or down an average of about 7.3% a day since the IPO, according to MarketWatch.

But Wedbush analyst Daniel Ives urged investors not to worry by repeating an earlier outperform rating and $130 price target for Rivian.

Company in ‘catbird’s seat’

“With the popularity and consumer demand for EVs on the trucking/SUV market, we believe Rivian is in the catbird’s seat to take considerable market share in this EV arms race under its visionary CEO and founder RJ Scaringe,” wrote Ives in a client research report that he provided to Capital.com.

Rivian has begun rolling out its R1T pickup truck and commenced production on a delivery van to be used initially by Amazon. The company aims for production of its R1S SUV to begin in earnest in 2022.

Vehicle production will fall “a few hundred vehicles short” of the initial 1,200 target, Scaringe told analysts Thursday 16 December after Rivian issued its first quarterly earnings report as a public company.

XRP/USD

0.68 Price
+0.050% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

US100

16,080.90 Price
+0.500% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0

BTC/USD

44,110.55 Price
-1.310% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Gold

2,004.85 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.50

He cited a production ramp-up at Rivian’s Normal, Illinois factory and component shortages as reasons for the delay.

What is your sentiment on RIVN?

19.11
Bullish
or
Bearish
Vote to see Traders sentiment!

Wall Street will be disappointed

“The Street will be disappointed to see a delivery shortfall,” Ives wrote. “However, this is a supply issue and clearly not a demand issue for Rivian, which remains the lynchpin to our bull thesis over the next 12 to 18 months. That said, with a lofty valuation relative to near-term numbers, the last thing the Street wanted to see for Rivian was a curtailing of growth/deliveries right out of the gate.”

Ives estimated that production will fall roughly 300 units short of Rivian’s goal.

Supply help on way

A second Rivian factory to be built east of Atlanta, Georgia, will help the company ramp up production, according to a company announcement Thursday.

Rivian will break ground on the plant in 2022, and vehicle production is expected to begin in 2024. The company said the facility will have a maximum annual production of 400,000 vehicles.

Ives wrote that the new plant will be a “key production artery for the company in coming years.”

Read More: Purdue Pharma .5bn bankruptcy plan tossed by US court

Markets in this article

RIVN
Rivian Automotive Inc.
19.11 USD
-0.13 -0.680%

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading