Rivian, the electric vehicle (EV) startup that made headlines with its record-breaking initial public offering (IPO) in 2021, is now facing a significant decline in share prices. Since reaching an all-time high of $129.95, the company's shares have plummeted by nearly 90 percent, hitting a low of $14.62 in New York on Thursday. This steep downturn places Rivian at risk of being removed from the prestigious Nasdaq 100 Index later this month.
JPMorgan analyst Min Moon recently highlighted the diminishing influence of Rivian's stock, noting that it accounted for less than 0.1 percent of the index in both April and May. The Nasdaq 100 Index typically eliminates its smallest constituents if they remain at such low levels for two consecutive months.
Based on this analysis, Moon predicts that Rivian will face delisting from the Nasdaq 100 by the third Friday of June. This would mark another setback for the company, as its stock has already experienced a decline of up to 20 percent this year, according to Bloomberg reports.
Although Rivian made a remarkable impression during its IPO, the company's share prices started to decline shortly after the initial excitement subsided. This downward trend was mainly fueled by a shift in investor sentiment towards startups, triggered by increasing interest rates that adversely affected the sales of high-priced electric vehicles.
Rivian is not the only EV startup facing challenges. Lucid, an American EV manufacturer known for its electric luxury sedan, has also encountered difficulties in attracting buyers. As a result, the company's share prices have fallen by 5.4 percent this year.
In a similar vein, Nikola, an electric truck startup, recently received a delisting notice from Nasdaq in May due to its shares trading below $1 for 30 consecutive days. Likewise, Lordstown, another EV startup, had to undergo a reverse stock split to avoid the risk of being delisted from the index as its shares approached the $1 mark.
However, not all EV startups are grappling with these issues. Tesla, the industry giant, has seen its stock price surge by 68 percent this year. Leveraging its manufacturing expertise and high-profit margins, Tesla continues to dominate the market, competing with well-established manufacturers like Ford and VW, who are pouring substantial investments into EV production.