Rivian Stock collapses after blockbuster IPO as Ford co-development plans canceled

Ben Moon / Rivian

Electric vehicle company Rivian saw its shares crash after it was announced that it no longer plans to co-develop an EV with Ford.

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Rivian, the electric vehicle company backed by Amazon and Ford, launched its initial public offering on Wednesday, November 10 in what became the largest IPO of 2021, as previously reported by GOBankingRates. It also places the company in second place, behind Tesla, as the largest American automaker.

Rivian shares rose 57% in their first two days on the Nasdaq. Rivian finished its first day as a state-owned company valued at nearly $ 88 billion, more than triple its last private valuation. That puts the electric vehicle maker on par with General Motors Co. and more valuable than Ford Motor Co., one of its major investors, as well as rival Lucid Group Inc., according to Bloomberg. When estimated on a fully diluted basis, the Irvine, Calif.-Based company is valued at around $ 98 billion, according to Bloomberg. The company raised $ 12 billion, the largest figure for any U.S. company since Facebook raised $ 16 billion in 2012, CNN reported.

In May, Ford announced that it had invested $ 500 million in Rivian, according to a press release.

Ford retains a 12% stake in Rivian, and when the company went public last week, that stake reached a value of more than $ 10 billion, according to CNBC.

“We respect Rivian and have had lengthy exploratory discussions with them, however, the two sides have agreed not to pursue any type of joint vehicle development or platform sharing,” Ford wrote in an emailed statement. , according to CNBC.

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Rivian, currently enjoying a higher market value than Ford, confirmed CNBC’s termination of its plans on Friday.

“As Ford scaled its own electric vehicle strategy and demand for Rivian vehicles increased, we mutually decided to focus on our own projects and deliveries. Our relationship with Ford is an important part of our journey, and Ford remains an investor and ally on our shared journey towards an electrified future, ”the company said in an emailed statement to CNBC.

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About the Author

Yael Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a vice president / senior content writer for major New York-based financial firms including New York Life and MSCI. Yael is now a freelance writer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.

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