Ahead of its Q4 and 2021 earnings report, Ford has said it expects to see a $8.2 billion boost to their bottom line thanks to their investment in Rivian.
The influx of money is the result of the Detroit-based automaker having a roughly 12% stake in the electric start up when it began trading on the NASDAQ exchange (RIVN) in November.
Rivian’s IPO price of $78 per share skyrocketed after its debut, jumping to an all-time high of $179.47 in the weeks following its debut.
The excitement around the automaker then began to slow down with share prices ending the year at just above $100.
However, things have not been as rosy in the first few weeks of 2022, as prices have plunged to below IPO levels and is currently trading at around $70 per share.
Part of the reason for Ford’s initial investment was a plan between the two automakers to jointly build an electric vehicle. Those plans were scrapped shortly after the IPO.
As a result, some believe Ford should sell their stake in Rivian when the lockup period ends and re-invest the windfall into the development of EVs in an attempt to catch up to Tesla.
“Once the post-IPO lock-up period is over and Ford can sell their shares, the company should look to use these profits to re-invest in itself. They are in a relatively strong position but are behind a cash-rich Tesla. This windfall could be used to supercharge the company’s recent $29bn investment into EVs and AVs, two key technologies which will be at the forefront of the automotive industry in the future,” Daniel Clarke, automotive analyst at GlobalData told CityAM.
Ford is scheduled to release their Q4 2021 and full year earnings on February 3, 2022.