Ford sells majority stake in Rivian after reporting $7.3B write-down •

Ford Motor Firm has bought a majority of its Rivian shares, in response to regulatory filings. Ford’s stake within the electrical automobile maker, which has been dropping steadily since Might 2022, is now at 1.15%, or 10.5 million shares.

The promote comes every week after Ford reported a $7.3 billion write-down on its Rivian funding final 12 months. Since February 2022, Rivian’s inventory has plummeted nearly 70%.

Ford has adopted this playbook with Rivian earlier than: Report a write-down, then promote to recuperate among the losses. Final April, Ford reported a $5.4 billion “mark-to-market loss” on its funding in Rivian. The next month, Ford bought 15 million shares in two separate transactions, bringing its stake within the EV maker under 10%.

Ford’s relationship with Rivian started with a $500 million funding within the precocious EV startup again in 2019. On the time, Ford additionally stated it will construct a automobile on Rivian’s “skateboard” platform. The legacy automaker canceled these plans in November 2021, citing a shift in route towards constructing its personal lineup of EVs. 4 months later, Ford elevated its in-house electrification funding to $50 billion via 2026, up from the earlier $30 billion by 2025. The automaker additionally stated it will run its EV unit as a separate enterprise from its combustion engine enterprise.

Different corporations, like Amazon, have reported a number of losses from their funding in Rivian. Final week, Amazon reported a $2.3 billion valuation loss in its Rivian inventory, which brought about a success to its earnings.

Why are corporations paying the worth for investing within the promising, if not troubled, EV firm? Recall that Rivian’s inventory hit a excessive of $179.47 per share earlier than falling to the $19.62 it’s at as we speak.

Rivian’s inventory is down 2.29% in afternoon buying and selling following experiences of Ford’s sale.

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