Rivian shares fall to record low after Ford announces stock sales worth more than $200 million

Ford Motor Co. showed how the early bird gets the worm, as the automaker would have made much less from the sale of Rivian Automotive Inc. stock if it had waited for the opening bell to start selling.

Rivian shares RIVN,
fell 2.2% to a record low in Tuesday morning trade, while Ford’s stock F,
0.1% slipped.

Ford announced in a Form 4 late Tuesday that it sold 8 million shares of the electric vehicle maker’s stock on the open market on May 9 at a price of $26.80 to raise $214.4 million.

Rivian’s shares had fallen 20.9% to a record low of $22.78 on May 9 after CNBC did so reported at the weekend that Ford was planning to sell 8 million Rivian shares as the lockup agreement expired on Sunday. The lockup agreement required investors not to sell shares for at least 180 days prior to the IPO.

The stock opened the regular session on May 9 at $25.00 and traded in a range of $22.45 to $25.83 before closing at $22.78. The only time the stock traded at or above $26.80 on May 9 was before 6:18 a.m. EST, according to 1-minute trade data provided by FactSet.

Basically, Ford had to start selling as soon as Rivian shares started trading in Monday’s premarket session.

FactSet, MarketWatch

The volume-weighted average price (VWAP) of Rivian stock during regular session hours was $24,434, according to a MarketWatch analysis of FactSet data. If Ford had sold its Rivian shares at that price, it would have made $195.47 million, or $18.9 million less than it actually did.

Ford’s sale represented 7.85% of its total interest in Rivian, as the Form 4 filing showed that Ford still owned 93.95 million Class A shares, or approximately 10.5% of the outstanding Class A shares.

In Ford’s first-quarter report, released in late April, the automaker said it recorded an unrealized loss of $5.4 billion on his Rivian involvement, on record a profit of $8.2 billion in the fourth quarter.

Rivian shares are down 78.5% year to date and Ford shares are down 35.8%, while the S&P 500 index SPX,
has lost 15.8%. Rivian shares fall to record low after Ford announces stock sales worth more than $200 million

Brian Lowry

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