It's a gradual disengagement, but the movement seems unstoppable.
Billionaire George Soros continues to sell shares of vehicle maker Rivian. The legendary investor disclosed in regulatory filings that he owns fewer Rivian shares as of Dec. 31 compared with his stake at Sept. 30.
Soros Fund Management held 14,344,823 Rivian (RIVN) shares at the end of fourth-quarter 2022, compared with 16,360,016 shares at Sept. 30. In three months, the hedge fund sold 2.01 million Rivian shares.
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Soros started selling Rivian shares in Q2 2022 despite being mostly long in the first quarter. The Democratic Party donor then became one of the major shareholders of the group, which manufactures the R1S SUV, the R1T pickup/truck and the EDV van, all at its Normal, Ill., plant.
As of March 31, Soros Fund Management held just over 25.88 million Rivian shares. This stake decreased to 17.84 million Rivian shares on June 30, and then to 16.36 million by Sept. 30.
Ford Is Also Paring Rivian Holdings
Soros has never publicly explained the reasons for his Rivian stock sales. But he's not the only one to reduce his exposure to the Irvine, Calif., company. Ford has notably announced that it has liquidated almost all its stake.
The Dearborn, Mich., company (F) sold 3.8 million shares of Rivian in the fourth quarter. In all of 2022, Ford, which initially held 101.9 million Rivian shares, or 12% of the capital, sold 91 million shares, according to regulatory filings. Ford now owns only 11 million Rivian shares.
Rivian
The legacy carmaker made good trades but could have done even better. Here's how:
Ford had invested $1.2 billion in Rivian (RIVN). The sale of the 91 million Rivian shares netted the company $3 billion, a gain of $1.8 billion. But given the surge in Rivian stock in the first months after its IPO, Ford could have sold at even higher prices -- but the stock market crash last year thwarted Ford's plans.
"The monetization of our Rivian stake ... is now nearly complete," Chief Executive Jim Farley told analysts during the fourth-quarter-earnings call on Feb. 2.
The year 2022 was a nightmare for the shareholders of the upstart electric-vehicle maker.
The stock fell 82.2%, which translated to $75.3 billion wiped out.
Many retail investors have seen their stock investments deteriorate.
Rivian's Problems
Rivian went public in November 2021, and the stock then rose as high as $180, which was clearly gold for early shareholders.
Its missteps and self-inflicted wounds last year completely changed the narrative around the firm.
For example, at the end of February, the company raised prices on its R1T electric pickup truck, by 17%, and its R1S SUV, by 20%, due to higher materials costs and chip shortages. But it applied the increases to all customers, both new and those who had already placed their orders.
In the face of an outcry and cancellations, the CEO at the time, RJ Scaringe, apologized. "We wrongly decided to make these changes apply to all future deliveries, including preexisting configured preorders," he said.
To this must be added the continued pandemic-related supply-chain disruptions, which have caused the automobile group's costs to soar.
This cocktail has complicated Rivian's effort to mass-produce its vehicles.
The company can still count on Amazon (AMZN). The e-commerce giant has not sold Rivian shares, even as the value of its stake in Rivian has lost ground. In the fourth quarter, for example, the pretax loss linked to its Rivian's holdings was $2.3 billion. In Q4 2021, Amazon had recorded a pretax gain of $11.8 billion linked to its stake in Rivian.
Amazon held a 17.34% stake in Rivian as of Dec. 30, according to FactSet.
The partnership between the two companies also extends to a commercial relationship, while Ford is Rivian's rival. Amazon has placed a gigantic order for the EDV, the commercial van developed by Rivian.
