Shares of Rivian Automotive (NASDAQ: RIVN) had been buying and selling decrease on Thursday, a day after The Wall Road Journal reported that rival electrical car (EV) maker Fisker (NYSE: FSR) could also be making ready to file for chapter.
As of two p.m. ET, shares of Rivian had been down about 8.3% from Wednesday’s closing value.
Key rival Fisker is in dire straits
The Journal reported on Wednesday afternoon that Fisker has “employed restructuring advisors to help with a attainable chapter submitting,” information that despatched the struggling electrical car maker’s inventory down by over 45% in after-hours buying and selling.
It wasn’t precisely a shock, although. In a “preliminary” earnings launch on Feb. 29, Fisker had mentioned it probably would not have sufficient money to outlive the subsequent 12 months, that it’ll lay off 15% of its workforce, and that it hoped to get a lifeline from a serious international automaker.
Fisker had as soon as hoped to construct and promote over 40,000 of its Ocean electrical SUVs in 2023. However after a sequence of early manufacturing snags — and after demand seemingly did not materialize — the corporate constructed simply 10,193 and managed to ship solely 4,929 of these to clients earlier than year-end. Now, it is brief on money, and — until that lifeline all of a sudden materializes — probably headed for chapter.
What does that need to do with Rivian? Rivian is a distinct firm in a really totally different state of affairs — however each Rivian and Fisker are members of a cohort of EV start-ups that went public earlier this decade, every with buyers hoping it will be the subsequent Tesla.
A lot of the different EV start-ups from that period are down right now as effectively.
Rivian is in higher form, however EV shares have a tendency to maneuver collectively
Rivian has its personal challenges, after all. However the firm delivered over 50,000 autos final 12 months, it had $10.4 billion in money and obtainable credit score traces as of the tip of 2023, it had over 68,000 preorders for its subsequent new mannequin a day after it was revealed, and — crucially — it was in a position to increase money twice final 12 months and ought to give you the chance to take action once more if the necessity arises.
However with Fisker seemingly on the breaking point, it is not likely stunning that Rivian inventory is taking a success right now.
Do you have to make investments $1,000 in Rivian Automotive proper now?
Before you purchase inventory in Rivian Automotive, think about this:
The Motley Idiot Inventory Advisor analyst workforce simply recognized what they imagine are the 10 finest shares for buyers to purchase now… and Rivian Automotive wasn’t considered one of them. The ten shares that made the minimize might produce monster returns within the coming years.
Inventory Advisor supplies buyers with an easy-to-follow blueprint for fulfillment, together with steerage on constructing a portfolio, common updates from analysts, and two new inventory picks every month. The Inventory Advisor service has greater than tripled the return of S&P 500 since 2002*.
*Inventory Advisor returns as of March 11, 2024
John Rosevear has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Tesla. The Motley Idiot has a disclosure coverage.
Why Rivian Inventory Is Getting Clobbered At this time was initially revealed by The Motley Idiot
