RJ Scaringe, 35-year-old CEO of Rivian presents the all-electric R1T pickup and the all-electric R1S SUV at the Los Angeles Auto Show in Los Angeles, California, November 27, 2018.
Mike Blake | Reuters
In its earnings report on Thursday, Amazon incurred a loss of $7.6 billion in its stake in Rivian. Shares of the electric vehicle maker plunged more than 50% in the first three months of 2022, reversing their trajectory from the fourth quarter, when the company held For the first time in the stock market And saw its value soar.
While Amazon has big ambitions for Rivian, signing an agreement to produce 100,000 delivery vehicles by 2030, current market conditions are challenging. Rivian He said last month That the company expects to produce only 25,000 electric trucks and SUVs this year, half the number expected by investors last year as part of a roadshow for its IPO.
Like most manufacturers, Rivian struggles with supply chain constraints and internal production hurdles. But Rivian was valued at $86 billion after its initial public offering, making the stock particularly vulnerable to a major downturn.
The fall of Rivian in 2022
The Nasdaq Composite fell 9.1% in the first quarter, its worst period since the first quarter of 2020, when the COVID-19 pandemic began. Riskier bets took the biggest hits as investors moved into assets considered safer in a period of high inflation and interest rates.
Rivian’s decline continued into the second quarter, with the stock down another 36%. It is now more than 80% of its high in November.
The drop in Amazon’s stock price is particularly significant, but it’s not the only tech company taking a huge hit on its stock investment.
earlier this week, the alphabet registered $1.07 billion loss on its investments “given market volatility”. Alphabet’s investment arms have supported companies including UiPathAnd FreshworksAnd Lift And Duolingowhich all fell into the market fainting.
Microsoft He said this week that his first-quarter profit slipped $174 million, in part due to “notable market losses in our portfolio of stocks.” And last week Explode, Explode It said it had a $92 million unrealized loss “on an investment that became public in the second half of 2021.”