Ford Motor Company has sold a majority of its Rivian shares, according to regulatory filings. Ford’s stake in the electric vehicle maker, which has been dropping steadily toptechtrends.com/2022/05/09/rivian-shares-down-more-than-17-following-report-of-ford-sell-off/#”>since May 2022, is now at 1.15%, or 10.5 million shares.
The sell comes a week after Ford reported a toptechtrends.com/2023/02/02/ford-earnings-left-2b-of-profits-on-the-table-in-2022/”>$7.3 billion write-down on its Rivian investment last year. Since February 2022, Rivian’s stock has plummeted almost 70%.
Ford has followed this playbook with Rivian before: Report a write-down, then sell to recuperate some of the losses. Last April, Ford reported a toptechtrends.com/2022/04/27/ford-earnings-weighed-down-by-rivian-stake/”>$5.4 billion “mark-to-market loss” on its investment in Rivian. The following month, toptechtrends.com/2022/05/09/rivian-shares-down-more-than-17-following-report-of-ford-sell-off/”>Ford sold 15 million shares in two separate transactions, bringing its stake in the EV maker below 10%.
Ford’s relationship with Rivian began with a toptechtrends.com/2019/04/24/ford-invests-500m-in-rivian-and-intends-to-build-a-vehicle-on-rivians-ev-platform/”>$500 million investment in the precocious EV startup back in 2019. At the time, Ford also said it would build a vehicle on Rivian’s “skateboard” platform. The legacy automaker toptechtrends.com/2021/11/19/ford-and-rivian-cancel-plan-to-jointly-develop-an-ev/”>canceled those plans in November 2021, citing a shift in direction toward building its own lineup of EVs. Four months later, Ford increased its in-house electrification investment to toptechtrends.com/2022/03/02/ford-increases-electrification-spend-to-50b-in-attempt-to-catch-up-to-tesla/”>$50 billion through 2026, up from the toptechtrends.com/2021/05/26/fords-30b-investment-in-electric-revs-up-in-house-battery-rd/”>previous $30 billion by 2025. The automaker also said it would run its EV unit as a toptechtrends.com/2022/03/02/ford-splits-ev-and-combustion-units-in-major-restructuring/”>separate business from its combustion engine business.
Other companies, like Amazon, have reported toptechtrends.com/2022/04/29/amazon-stock-plunges-to-two-year-low-following-first-quarter-loss/”>several losses from their investment in Rivian. Last week, Amazon reported a $2.3 billion valuation loss in its Rivian stock, which caused a hit to its income.
Why are companies paying the price for investing in the promising, if not troubled, EV company? Recall that Rivian’s stock hit a high of $179.47 per share before falling to the $19.62 it is at today.
Rivian’s stock is down 2.29% in afternoon trading following reports of Ford’s sale.
toptechtrends.com/2023/02/09/ford-sells-majority-stake-rivian/”>Ford sells majority stake in Rivian after reporting $7.3B write-down by toptechtrends.com/author/rebecca-bellan/”>Rebecca Bellan originally published on toptechtrends.com/”>TechCrunch
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