Rivian (RIVN) is facing the possibility of being removed from the Nasdaq 100 Index this month, as its shares have plummeted over 90 percent from their record high.
Rivian first went public in November 2021, with its share prices reaching a record high above $170 shortly thereafter. Since then however the automaker has worked through a difficult production ramp in the midst of a global pandemic and supply chain disruptions, causing the stock to lose over 90% of its value. It is this steep drop off in share price that could see Rivian lose its spot on the Nasdaq 100 Index, according according to JP Morgan Securities analyst Min Moon. (via Automotive News)
According to Moon this could happen because of the company’s diminished weighting in the index, which has fallen below 0.1 percent for two consecutive months. If this trend continues, Rivian may face exclusion from the index. ON Semiconductor is considered the top candidate to take Rivian’s spot, Moon says.
While it hasn’t happened yet, being removed from the Nasdaq 100 Index would be another blow to Rivian’s already struggling stock. The index’s exclusion would diminish the company’s visibility and potentially reduce its attractiveness to institutional investors who track the index. Consequently, Rivian may experience additional downward pressure on its stock price, as it could lose institutional support and face challenges in raising capital.
Despite losing over 90% of its share price, Rivian appears to have the best shot of making it compared to some of the other EV automakers that have launched in the last few years. As of the most recent update from Rivian, they are still on track to produce 50,000 vehicles this year, double what it produced in 2022, and have nearly $12 billion in cash or cash equivalents at the end of Q1 2023 to keep them going.
This compares to the likes of Lucid which has already lowered its 2023 production guidance to just 10,000 vehicles, and who this week announced a new funding round to raise $3 billion, most of which will come from its largest shareholder, the Saudi Public Investment Fund (PIF).
Rivian (RIVN) is currently trading at around $14.80 per share.
