Why Rivian Automotive Fell as Much as 19.1% This Week
Shares of Rivian Automotive (NASDAQ: RIVN) fell as much as 19.1% this week, according to data from S&P Global Market Intelligence. The electric vehicle (EV) start-up got a hangover from a recent partnership announcement and is likely getting hammered by recent inflation data and interest rate adjustments by the Federal Reserve. As of 1:05 p.m. ET on Friday, the stock is down 14.7% this week.
Last week, Rivian announced a partnership with Mercedes to produce EV vans under a combination of the Rivian and Mercedes brands. The companies are starting a joint venture factory in Europe, but the timeline and size of the manufacturing deal are unclear at this moment. When news of the deal came through earlier this month, Rivian shares soared 20%. This created a tough comparison for shares this week, and once this short-term pop ended, Rivian shares came back down to earth.
Rivian is also getting hit along with virtually every other stock right now. The market is taking a beating this week, down around 5% or so in the last five trading days. Why? A confluence of reasons. But the biggest is the Federal Reserve's decision to raise interest rates by 75 basis points yet again to help fight inflation. When interest rates rise, it is generally tougher for businesses to secure financing to grow their operations. This makes investors especially nervous about companies like Rivian that have minimal revenue and are still in the early stages of growth.
Source Fool.com
