It's official.
Ford (F) disclosed in a Securities and Exchange Commission document that it sold Rivian (RIVN) stock.
This decision represents a blow to the upstart manufacturer of electric vehicles, which is trying to convince investors it can manage increases in production rates while experiencing disruptions in supply chains.
Ford, which held 102 million Rivian shares, sold 8 million of those Rivian shares on May 9, according to the filing posted on May 10.
The price at which they were sold is $26.80, the Dearborn, Mich.-based company said.
Ford's stake in the Irvine group, a California-based company, is now 10.5%, which represents 94 million shares.
The price at which Ford sold its Rivian shares is lower than the closing price of Rivian stock on May 6, the last trading session before the transaction.
That day Rivian shares closed at $28.79.
But as early as May 9, CNBC reported that the maker of the F-150 Lightning electric pickup had decided to sell Rivian shares at the end of the lockup period that ended May 9.
Since that news, Rivian shares have tumbled more than 30% to $20.0 at the time of writing.
The electric vehicle manufacturer is due to publish its first quarter results on May 11.
In the event of bad news, it is possible that Rivian shares will tumble further.
Ford did not give the reason why it decided to reduce its stake in Rivian.
The sale coincides with the end of the lockup, which is a period during which the initial investors of a company which goes public cannot sell their shares to avoid flooding the market.
Amazon Remains Committed to Rivian
"Rivian is an important partner for Amazon, and we are excited about the future," a spokesperson of the e-commerce giant said in an emailed statement.
"Putting 100,000 electric delivery vehicles on the road by 2030 is no small feat, and we remain committed to working with Rivian to make it a reality.”
Amazon holds 17.74% of Rivian as of December 31.
Rivian cannot comment because the company is in a regulatory quiet period.
The value of Ford and Amazon's stakes in Rivian fell sharply in the first quarter, causing financial losses to both companies.
"We reported an overall net loss of $3.8 billion in the first quarter," Brian Olsavsky, Amazon's chief financial officer, told analysts on April 29 during the first-quarter-earnings call.
"While we primarily focus our comments on operating income, I'd point out that this net loss includes a pre-tax valuation loss of $7.6 billion included in non-operating expense from our common-stock investment in Rivian Automotive."
Ford Hangs In There
Ford, for its part, posted a net loss of $3.1 billion from January to March.
"A net loss of $3.1 billion was primarily attributable to a mark-to-market loss of $5.4 billion on the company’s investment in Rivian. Adjusted earnings before interest and taxes were $2.3 billion," Ford said.
Ford’s stake in Rivian was valued at $5.1 billion on March 31, down more than half from $10.6 billion at the end of 2021, the company said.
Rivian shares lost 52% — more than half — of their value in the first quarter.
Rivian was founded in 2009 and went public in 2021.
From its factory in Normal, Ill, the carmaker produces three vehicles: the R1T electric pickup, the R1S electric SUV, and the RCV electric commercial van.
The company, which is in the process of increasing production rates, cooled off investors in March by lowering its production target to 25,000 vehicles for 2022.
The Normal plant has production capacity of 50,000 units.
Rivian attributed the revision to problems in its supply chain.
Suppliers are hindered by restrictions linked to the Covid-19 pandemic as well as by the increase in the price of raw materials and the shortage of chips.
