Shares of Rivian Automotive (NASDAQ: RIVN) had been buying and selling decrease on Thursday, a day after The Wall Avenue Journal reported that rival electrical car (EV) maker Fisker (NYSE: FSR) could also be getting ready to file for chapter.
As of two p.m. ET, shares of Rivian had been down about 8.3% from Wednesday’s closing worth.
Key rival Fisker is in dire straits
The Journal reported on Wednesday afternoon that Fisker has “employed restructuring advisors to help with a potential chapter submitting,” information that despatched the struggling electrical car maker’s inventory down by over 45% in after-hours buying and selling.
It wasn’t precisely a shock, although. In a “preliminary” earnings launch on Feb. 29, Fisker had mentioned it possible does not have sufficient money to outlive the subsequent 12 months, that it’ll lay off 15% of its workforce, and that it hoped to get a lifeline from a significant world automaker.
Fisker had as soon as hoped to construct and promote over 40,000 of its Ocean electrical SUVs in 2023. However after a collection of early manufacturing snags — and after demand seemingly did not materialize — the corporate constructed simply 10,193 and managed to ship solely 4,929 of these to clients earlier than year-end. Now, it is brief on money, and — until that lifeline immediately materializes — possible headed for chapter.
What does that should do with Rivian? Rivian is a special firm in a really totally different scenario — however each Rivian and Fisker are members of a cohort of EV start-ups that went public earlier this decade, every with buyers hoping it might be the subsequent Tesla.
Many of the different EV start-ups from that period are down at this time as nicely.
Rivian is in higher form, however EV shares have a tendency to maneuver collectively
Rivian has its personal challenges, after all. However the firm delivered over 50,000 automobiles final 12 months, it had $10.4 billion in money and out there credit score strains as of the tip of 2023, it had over 68,000 preorders for its subsequent new mannequin a day after it was revealed, and — crucially — it was capable of elevate money twice final 12 months and ought to find a way to take action once more if the necessity arises.
However with Fisker seemingly on the breaking point, it is not likely stunning that Rivian inventory is taking a success at this time.
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John Rosevear has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Tesla. The Motley Idiot has a disclosure coverage.
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