Amazon takes $7.6 billion loss on Rivian stake from Q1 stock plunge

R.J. Scaringe, Rivian’s 35-calendar year-aged CEO, introduces his company’s R1T all-electric pickup and all-electric powered R1S SUV at Los Angeles Vehicle Demonstrate in Los Angeles, California, November 27, 2018.

Mike Blake | Reuters

Amazon invested in electric auto maker Rivian in 2019 as part of a program to go inexperienced. All through the initially quarter, it noticed almost nothing but red.

In its earnings report on Thursday, Amazon took a $7.6 billion reduction on its stake in Rivian. Shares of the EV manufacturer plummeted by far more than 50% in the first 3 months of 2022, reversing program from the fourth quarter, when the firm held its inventory industry debut and observed its worth skyrocket.

Even though Amazon has big ambitions for Rivian, signing an settlement for the output of 100,000 shipping and delivery vehicles by 2030, present market conditions are tough. Rivian mentioned very last thirty day period that the firm expects to create just 25,000 electric powered vehicles and SUVs this year, half of the selection forecast to investors final calendar year as aspect of its IPO roadshow.

Like most makers, Rivian is battling via offer chain constraints and inside manufacturing snags. But Rivian was valued at $86 billion soon after its IPO pop, producing the stock specifically vulnerable to a key pullback.

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Rivian’s fall in 2022


The Nasdaq Composite dropped 9.1% in the 1st quarter, its worst period since the very first quarter of 2020, when the Covid-19 pandemic was beginning. The riskiest bets took the greatest hits as investors rotated into property considered safer in a period of soaring inflation and desire charges.

Rivian’s fall has continued into the second quarter, with the stock plummetting a different 36%. It can be now much more than 80% off its higher from November.

On Wednesday, Ford took a $5.4 billion reduction on its 12% stake in Rivian. Amazon has a about 18% stake, in accordance to FactSet, investing a total of much more than $1.3 billion into the company.

Amazon’s markdown is particularly huge, but it is really not the only tech organization which is getting a beating on its fairness investments.

Before this 7 days, Alphabet recorded a $1.07 billion reduction on its investments “presented sector volatility.” Alphabet’s investment decision arms have backed organizations which include UiPath, Freshworks, Lyft and Duolingo, which have all gotten caught up in the current market swoon.

Microsoft said this 7 days that its to start with–quarter revenue took a $174 million hit in aspect thanks to “mark-to-market place losses on our equity portfolio.” And very last 7 days Snap stated it experienced a $92 million unrealized reduction “on expenditure that grew to become public in H2 2021.”

Observe: Rivian’s CEO self-assured the business can create 25,000 vehicles this yr