June 22, 2022

Tuesday Ticker: May 17, 2022

Toronto, Ontario ⁠— This week, Ford is dumping more than 15 million of its shares in Rivian, while a company known for car “vending machines” finds itself in tough times.

Difficult week for Rivian

Ford sold more than US$400 million in Rivian stock last week.

The automaker sold eight million shares of Rivian on May 9, then unloaded an additional seven million shares last Friday.

Ford sold all eight million shares at $26.80 per share, for a total of $214 million, when the seven million shares it sold Friday sold at an average price of $26.88 per share, for a total of $188.42 million.

Rivian first went public last November with shares priced at US$78 per share. Despite surging to over US$170 per share, the stock has fallen drastically in 2022, thanks to supply chain issues and lowered production targets.

Analysts had expected Rivian to produce around 40,000 vehicles this year, but Rivian said in March it now expects 25,000 units in 2022.

The automaker produced 2,553 vehicles in the first quarter of 2022, according to Rivian’s first quarter 2022 financial results.

As of 3:30 p.m. ET on Monday, Rivian shares were trading at US$24.92.

Long live the vending machine?

Online used car retailer Carvana⁠, a company known for its multi-storey car vending machines⁠’ — has seen its shares fall almost 90% since November 2021.

Once priced at more than $300 per share, the company seeking to transform the car buying process traded at $38.32 per share Monday afternoon.

The business has grown exponentially during the pandemic, with buyers looking to purchase vehicles online rather than visiting a dealership. Carvana has been listed on the stock exchange since 2017⁠⁠, but analysts worry about the company’s liquidity, rising debt and expectations of slowing growth. This year is expected to be Carvana’s slowest growth year as a publicly traded entity.

The business slowdowns are largely due to high vehicle prices, rising interest rates and recession fears, among other factors, analysts said.

Carvana stock is rated “hold” with a price target of $89.30 per share, according to analyst estimates compiled by FactSet.