RJ Scaringe, 35-year-old CEO of Rivian, unveiled his company’s R1T electric pickup and R1S all-electric SUV at the Los Angeles Auto Show in California on November 27, 2018.
Mike Blake | Reuters
Amazon invested in the electric vehicle manufacturer Rivian in 2019 as part of a plan to achieve green. Only red was seen in the first quarter.
In its earnings report on Thursday, Amazon reported a $ 7.6 billion loss on its stake in Rivian. The shares of EV manufacturer fell more than 50% in the first three months of 2022, reversing its trajectory in the fourth quarter when the company debuted on the stock exchange and rose in value.
Although Amazon has high ambitions for Rivian, signing an agreement to produce 100,000 delivery vehicles by 2030, current market conditions are dire. Rivian said last month that the company expects to produce only 25,000 electric trucks and SUVs this year, half of the amount expected from investors last year, as part of its IPO roadshow.
Like most manufacturers, Rivian is struggling with supply chain constraints and problems between domestic production. But Rivian was worth $ 86 billion after its IPO pop, making shares particularly vulnerable to a major setback.
Rivian’s fall in 2022
The Nasdaq Composite fell 9.1% in the first quarter, the worst period since the first quarter of 2020, when the Covid-19 pandemic began. The most risky bets were the most successful, as investors turned to assets that were considered safer at a time when inflation and interest rates were rising.
Rivian’s decline continued in the second quarter, with shares down another 36%. There is now a discount of over 80% from November.
On Wednesday, Ford lost $ 5.4 billion in its 12% stake in Rivian. Amazon has a roughly 18% stake, according to FactSet, with a total investment of more than $ 1.3 billion in the company.
Amazon’s markdown is particularly high, but it’s not the only technology company that is taking a hit on its capital investments.
Earlier this week, Alphabet reported a $ 1.07 billion loss in its investments “in view of market volatility.” Alphabet’s investment areas have been backed by companies such as UiPath, Freshworks, Lyft and Duolingo, all of which have been trapped in the market.
Microsoft said this week that its first-quarter earnings were $ 174 million in part, “due to market losses in our stock portfolio.” And last week Snap said it had a loss of $ 92 million “because of the investment that was made public in H2 in 2021.”
SEE: Rivian’s CEO is confident the company can produce 25,000 vehicles this year
Amazon is losing $ 7.6 trillion in Rivian shares due to a fall in Q1 shares
Source link Amazon is losing $ 7.6 trillion in Rivian shares due to a fall in Q1 shares