Rivian Stock (NASDAQ:RIVN)
S&P Global Market Intelligence data shows that Rivian stock dropped as high as 19.1% this week. The EV startup is suffering from the aftereffects of a recent partnership announcement and the recent inflation figures and interest rate adjustments made by the Federal Reserve. The stock price is 14.7% down this week as of 1:05 PM ET on Friday.
What’s the Reason
A joint line of electric vans bearing the Rivian Automotive (NASDAQ:RIVN) and Mercedes names was introduced last week. There will be a joint venture facility in Europe. However, its exact location and production volume are yet unknown. As soon as word of the deal broke earlier this month, shares in Rivian stock shot up by 20%. As a result, this week’s shares had a hard time keeping up, and after this week’s temporary surge in price ended, Rivian shares fell down to earth.
Like most other stocks, Rivian stock has taken a beating recently. This week the market has been beating, falling almost 5% over the last five days. Why? The factors have come together. The largest, however, is the Fed’s decision to increase interest rates by another 75 basis points to combat inflation. Generally, it becomes more difficult for firms to obtain financing for expansion when interest rates rise. Companies like Rivian Automotive (NASDAQ:RIVN), which have generated very little revenue thus far and are still in their formative stages, have caused investor apprehension for this exact reason.
What Should You Do Now?
The excellent news for Rivian Automotive (NASDAQ:RIVN) is that the company’s financial stability is not dependent on future interest rates. The company’s IPO in 2021, at the height of the bull market, brought in about $12 billion. It has about $15 billion in cash and equivalents on its financial sheet, giving it plenty of breathing room as it seeks to expand its EV production capacity over several years.
In addition to this capital surplus, Rivian Automotive (NASDAQ:RIVN) is in good shape since Amazon, another of its early partners has agreed to purchase 100,000 EV vans to power its delivery fleet. Investing in a company that hasn’t even begun selling automobiles is less dangerous, and this early customer should offer Rivian a demand floor. If you’re interested in the electric vehicle business, now might be a good time to acquire Rivian stock because of its recent decline in price, massive cash reserves, and collaborations with Amazon and Mercedes.
Featured Image- Megapixl @ Viewimage
Author Shariq Khan 
