CEO R.J. Scaringe’s recent purchase means he owns about 4.5 million shares of Rivian stock.
Courtesy of Rivian
Rivian ’s CEO R.J. Scaringe stepped up and bought the dip in his company’s stock, purchasing 41,000 shares of the electric vehicle start-up on Monday.
The purchase, disclosed late Monday, seems to be helping shares Tuesday. Rivian Automotive (ticker: RIVN) stock is up about 3.8% in premarket trading. S&P 500 and Dow Jones Industrial Average futures are up about 1.8% and1.5%, respectively.
The Tuesday jump gets investors back some of the [previous day’s decline. Rivian stock dropped 6.9% in Monday trading. There were a few reasons for that fall. For starters, it was a tough day for tech. The Nasdaq Composite dropped 1.2%. And Tesla (TSLA) stock dropped 5.9%. Tesla trading can impact stock in other electric vehicle makers.
The biggest reason was likely more selling by Rivian investor Ford Motor (F). Ford has sold 15 million shares since May 9 when the lockup prohibiting insiders from selling shares post-IPO expired.
The Ford sale takes its ownership in Rivian below the 10% threshold. That means investors won’t see more sales filed from the traditional auto maker. Investors will have to hear about Ford sales on the company’s quarterly conference calls.
Not knowing what Ford is doing might not be a bad thing. The IPO lockup expiration had been a significant overhang for Rivian shares. The month coming into the lockup expiration, Rivian stock was down 26% compared with an 11% drop in the Nasdaq.
With Scaringe’s recent purchase he owns about 4.5 million shares of Rivian stock. He also holds about 27 million stock options that vest based on time and business performance.
Now investors have to decide if Scaringe’s purchase represents a bottom in Rivian stock.
Shares have been badly beaten up amid inflation, supply chain challenges and Rivian’s own challenges in ramping up production. Coming into Tuesday trading, shares are down about 76% year-to-date.
The stock declines have left the company’s enterprise value, which is in this case essentially Rivian’s market capitalization less the cash on the balance sheet, at about $7.5 billion. At the start of 2021, the enterprise value was close to $75 billion.
Write to Al Root at [email protected]
