What Does Ford's Financial Situation Mean for Rivian?

skyote

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Electronaut

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I can't believe that article has made the rounds on so many sites. Read the disclosure at the bottom, the author is a swing trader! He trades off swings in a company's stock price so this is a doomsday hit piece IMO and for all we know he's got a short position on Ford and hoping this article helps drop the stock price.

Ford would sell itself off before going into bankruptcy. The Ford family isn't going to let their shares/interests in the company be reduced to nothing by letting the company enter bankruptcy.

The company is allied with VW now so I'm sure VW would entertain buying the company if the Ford family were interested in selling.
 
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skyote

skyote

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I can't believe that article has made the rounds on so many sites. Read the disclosure at the bottom, the author is a swing trader! He trades off swings in a company's stock price, so this. This is a doomsday hit piece IMO and for all we know he's got a short position on Ford and hoping this article helps drop its price so he can make $ from shorting Ford stock.

Ford would sell itself off before going into bankruptcy. The Ford family isn't going to let their shares/interests in the company be reduced to nothing by letting the company enter bankruptcy.

The company is allied with VW now so I'm sure VW would entertain buying the company if the Ford family were interested in selling.
Good call, I didn't read the author bio (lol @ "four years experience"). Google fed me the news story, but I did confim the bond ratings...looks like it's been months, but it was the first I heard this.
 

ajdelange

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Had Rivian lent money to Ford it might be something to worry about but in this case it's the other way round (unless it's being done in tranches and subsequent tranches never materialize).

Of greater interest to me is that checking out the link led me to other places where I learned that not only is (or was) the E Mustang now available but that the first year's production (50,000 cars) is already subscribed. That's good news in the sense that it looks as if finally there is going to be viable competition in the BEV market but it is also good news in the sense that those cars have to charge somewhere and that somewhere will include the Ford Pass charging network, whatever that turns out to be. What it could be is a DC fast charger at every (or many) Ford dealership of which there seems to be one in every mid sized town in America. Given the buddy-buddy relationship between Ford and Rivian perhaps Rivian owners will be able to use these.
 

electruck

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Funding wouldn't be the only thing at risk though. Don't forget about all those Lincoln(?) SUV orders that could potentially evaporate. That said, I'm not overly concerned. They may restructure but they're already in the middle of doing that. They may get less favorable terms or be forced to accept more outside influence on direction... but they will still continue moving forward. And the Rivian investment is a strategic part of their path forward.
 
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Hmp10

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Had Rivian lent money to Ford it might be something to worry about but in this case it's the other way round . . . .
I don't know the specifics of the arrangement, but all the press reports billed this as Ford's having "invested" in Rivian, which would not suggest a loan. If Ford actually took a stake in Rivian, that stake would become an asset of Ford that would become part of any bankruptcy action, meaning Rivian could end up with an unanticipated partner or partners.

Ford has been rumored to be on the edge of bankruptcy almost as often as Tesla. I tend toward the view that some of these alarms might be set off by short sellers, who have plagued Musk endlessly and might now be looking for another automotive short play since their Tesla play didn't pan out so well.
 

electruck

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Another very good point, Hmp10. Ford did make an equity investment and took a seat on Rivian's board of directors.

The fact that recession fears seem to be easing would also seem to go against the short's position that another downgrade is imminent.
 
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ajdelange

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I'm not disagreeing but "invest in" can mean many things beyond transferring shares for cash. Several of these, such as an exchange of Rivian shares for Ford shares, could, of course, result in disastrous consequences for Rivian in the event of Ford's demise. As I recall a seat for Ford on the Rivian board was not part of the deal.

[EDIT]Which only demonstrates that my recall isn't so good. Ford does indeed get a seat.
 

Hmp10

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According to Bloomberg, Joseph Hinrichs of Ford sits on the Rivian board. "Electrek" has also reported that Cox Automotive is getting a seat on the board as part of its investment. Can't find any indication that Amazon took a seat.
 
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Pherdnut

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I think the better question is, what does getting access to Rivian's skateboard and getting the opportunity to tap into Rivian's exceptional talent pool mean for Ford/Lincoln? I think Ford hitched their what-the-crap-do-we-do-about-ev wagon to the right EV startup.

As for risk incurred by Rivian, they have 100,000 Amazon vans to build, Ford to help with the mass-manufacturing stuff, and Cox to help with the actually-getting-them-sold details. I think they're going to be okay. Like their launch vehicles could flop (they won't) and they'd still be viable.

If Rivian went public I'd be selling organs to buy more stock. They won't any time soon because they're smart.
 

Joel

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If Rivian went public I'd be selling organs to buy more stock. They won't any time soon because they're smart.

Or greedy depends on how you look at it. There is so much money available now outside the stock market that a lot of the general public does not get to be apart of the big rapid growth. Look at the IPO’s the last few years. Most don’t grow like Tesla, Amazon, Netflix, etc. a lot of that has to do with VC funds being involved for so long they get the huge payday when the stock goes public. I also understand what going public means internally to a company. I do hope to get the chance.
 

Hmp10

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After all the trouble Elon Musk had with short-sellers trashing every move Tesla made and overhyping every glitch with the cars in an attempt to profit off stock price declines, Rivian would be very smart to stay out of the public markets as long as they can.
 
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