Why Rivian Stock Popped, Dropped, Then Recovered Today

Source The Motley Fool

Investors are digesting a flurry of news surrounding electric vehicle (EV) maker Rivian Automotive (NASDAQ: RIVN). It seems the market doesn't know what to make of the mixed bag of information either.

Rivian shares jumped as much as nearly 6% early today before turning negative by 3%. As of 10:55 a.m. ET, the stock had recovered and was trading higher by 3.2%.

Rivian's capital influx

The big news from the EV start-up today was a commitment for a conditional loan of up to $6.6 billion from the U.S. Department of Energy (DOE). That funding, coming through a DOE manufacturing loan program, would help the company with the construction of a planned new production plant in Georgia.

Rivian has paused those construction plans as it works to conserve capital while ramping up production of its electric SUVs, pickup trucks, and delivery vehicles. It comes after the company recently announced investments of up to $5.8 billion from Volkswagen Group.

Rivian still had nearly $8 billion in cash and equivalents, as of June 30. That includes $1 billion from a convertible note issued to Volkswagen as part of that agreement. But the company is preparing to begin construction of its next-generation R2 model next year and plans a future R3 model beyond that.

Those plans are capital intensive, so the influx of funding is welcome news and explains the early pop in the stock today. The company will begin producing the R2 at its existing Illinois facility, but the new Georgia plant is expected to significantly bolster Rivian's capacity by as much as 400,000 units annually.

The first phase of that plant won't begin production until 2028, though. And much can happen in the intervening years. That includes uncertainty related to EV tax credits with a new administration taking over next year. News that California could offer its own tax credits should the Trump administration cancel existing credits helped boost Rivian stock yesterday.

While uncertainty remains, the new loan commitment is a positive development for the company, and why investors ultimately pushed the stock higher today.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $352,678!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,102!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $466,805!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Howard Smith has positions in Rivian Automotive. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Outlook 2025As the Bitcoin market continues to mature, its 2025 outlook appears highly favourable, driven by institutional adoption and regulatory developments.
Author  TradingKey
Jan 23, Thu
As the Bitcoin market continues to mature, its 2025 outlook appears highly favourable, driven by institutional adoption and regulatory developments.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Ethereum Price Explodes Past $2,200 with 25% Surge—Momentum Builds FastEthereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
Author  NewsBTC
May 09, Fri
Ethereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
goTop
quote