Ford just announced a $3.1 billion loss. Blame it on Rivian 2022-04-27 17:54:30


Yes, this is correct. stronghold (F)which has been making cars and trucks for more than a century and has already sold more electric cars than the Rivian, just reported a loss due to a slip in Rivian stock.
You see Ford, along with Amazon (AMZN)She was an early supporter of Rivian, which was founded in 2009 and went public last year. Ford invested $500 million in the startup in April 2019, when the two companies announced plans to develop electric trucks together. Those plans never came to fruition, but Ford kept its investment in place.

And while the stock has fallen for the past five months, he’s probably happy about it.

IPO of Rivian In November it was a hit, raising $12 billion for the company in the largest public offering since Facebook debuted in 2012. Everyone wanted to get involved in what could be the next Tesla, and they all thought Rivian might just be the company. Let’s do it. The stock doubled more in the first week of trading, making it More valuable than any car maker On the planet other than Tesla (TSLA) And Toyota (TM).

Then the reality began.

Two weeks later, Ford and Rivian announced that they would not be working together on a truck Rivian shares falling Up to 17% in one day. In December, it announced plans for a second plant, but also stated that initial sales of its electric truck did not live up to expectations. The company’s shares continued to decline IPO after post, and fell by 10% in one day.
By the end of 2021, Rivian’s shares were 40% lower than they were from their highest close in the week following the IPO. However, it was worth about $92 billion, or about $10 billion more than Ford itself. This means that Ford’s initial investment of $500 million in Rivian was worth $10.6 billion. And so was Ford I mentioned a gain On this investment of $9.1 billion for this year.
Rivian shares continue to decline due to supply chain problems Investors warn From any car maker other than Tesla, whether they make electric or gas-powered cars.
CEO and founder of Rivian RJ Scaringe, Ford CEO Bill Ford in 2019 when they announced Ford's investment of $500 million in the innovative electric truck maker.

So far this year, Rivian shares are down 70% through Wednesday’s close. So, Ford announced Wednesday afternoon that it received $5.4 billion in pre-tax fees related to its investment in Rivian, which lost about half its value during the first quarter.

This led Ford to report a net loss of $3.1 billion. It would have generated $1.6 billion in profit without special fees.

That $1.6 billion profit, excluding special items, was slightly better than Wall Street’s expectations, although it was down 44% from what it reported a year earlier. Automotive revenue of $32.1 billion fell 4%, although it beat expectations by nearly $1 billion.

Ford F-150 Lightning Electric Truck Begins Important Product Launch
As has been the case throughout the auto industry, Ford’s supply chain problems, such as shortages of computer chips, have limited the number of vehicles it can make and sell. In fact, it had 53,000 vehicles at the end of the quarter that were mostly completed but Waiting for components to be installed affected Semiconductor supply shortage. On Wednesday, Ford CEO Jim Farley described the results as “mixed”.

“The appeal of our new products is really clear, and customer demand is very strong beyond supply constraints in our industry,” Farley said on a call with investors.

On Wall Street, fearing the worst, investors shrugged off Ford’s fee for Rivian and focused on its better-than-expected results. Consequently, Ford’s shares rose more than 1% in after-hours trading.