Amazon drops 10% as loss on Rivian stings investors
The giant retailer took a $7.6 billion loss on its stake in the EV maker, giving its investors a rare reason to worry. Amazon shares fall 10%.
Amazon (AMZN) investors may be upset that the company put electric-vehicle maker Rivian (RIVN) in its shopping cart.
Shares of the retail giant fell about 10% after hours after reporting its first losing quarter since 2015, with a $7.6 billion loss on its Rivian stake getting much of the blame. Amazon holds about 20% of Rivian.
Amazon stock might have been hit anyway, as revenue numbers showed slower growth than expected and disappointing forecasts. “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.
The Rivian disappointment stands out partly because Ford (F), another early Rivian backer, reported a loss yesterday and also cited Rivian’s woes.
Amazon’s long-term record remains impressive — the stock is up more than 200% in five years — but its investors in the short term will want to keep an eye on the upstart automaker as well.
Rivian’s rise and fall
Rivian hit the market last November in one of the most successful IPOs in years, bolstered by big-name early investors and a commitment to supply thousands of electric delivery vans to Amazon.Priced at $78, shares quickly jumped above $179. At its peak, Rivian ranked as the third-largest automaker in the world by market cap.
But the price has been falling ever since amid slow deliveries and the supply chain issues hurting many automakers. In March, the company said it would produce only 25,000 vehicles this year, well below expectations.
The stock now stands around $32, which is bad news for investors — including Amazon. However, Rivian does in the long term.
For a longer-term view of these stocks, see our guides to Amazon and Rivian.
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