Ford Should Sell Overvalued Rivian Stock in 2022

Back in 2019, Ford Motor Company (NYSE: F) invested $500 million in electric-truck start-up Rivian Automotive (NASDAQ: RIVN). In conjunction with the investment, Ford announced plans to build an electric vehicle (EV) based on Rivian's vehicle platform.

As a financial investment, the Rivian stake has generated a huge windfall for Ford. However, the strategic aspect of the investment has fallen apart, as the two companies no longer plan to collaborate on vehicle development. With Rivian stock trading at an extraordinarily high valuation for a glorified start-up -- even after a sharp pullback from its November peak -- Ford should look to sell its Rivian shares in 2022.

Before the pandemic, Ford planned to build a Lincoln-branded crossover on Rivian's platform, complementing the EVs it expected to develop fully in-house. It canceled that project in April 2020, but the companies said at the time that they would develop a different Ford vehicle on Rivian's platform.

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Source Fool.com