George Soros deals a big blow to rival Tesla Rivian
August has been rather hectic for Rivian (countryside) .
The startup, which is presented as one of Tesla (TSLA) The most dangerous competitor in the electric car race, is currently piling up on setbacks.
The electric car maker just reported mixed earnings for the second quarter. While the company kept its forecast unchanged for production of 25,000 vehicles in 2022, it lowered its main profit target due to continuing supply chain problems.
“The supply chain remains the determining factor in our production,” the company said on August 11 in a letter to shareholders. “Throughout the quarter, our cost of materials was affected by inflationary pressures, which we believe will continue to affect in the near future.”
facing a great challenge
CFO Claire McDonough later described these inflationary pressures to analysts.
“We have seen unprecedented levels of inflation particularly across the prices of our raw materials, inputs and lithium which are up north by 115% since the beginning of this year, in particular along with Covid and other factors that have led to a challenging supply chain and inflationary environment in addition to that being part of that.” .
But the company said it was making “progress” with its suppliers: “We expect to be able to add a second vehicle assembly shift at the end of the third quarter.”
As of June 30, Rivian had only built 6,954 cars. In other words, it must manufacture at least 18,046 vehicles during the second half of the year to achieve its goals.
The automaker also said it expects to lose a little more money than initially expected this year. Its adjusted annual loss before interest, taxes, depreciation, and amortization (EBITDA) should be approximately $5.45 billion. The company had previously said it expected full-year EBITDA of $4.75 billion.
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Soros sold millions of shares of Rivian
Besides this bad news, Rivian has just received an additional blow, and this blow comes from famous investor George Soros. In fact, in a regulatory document filed with the Securities and Exchange Commission (SEC) on August 12, billionaire company Soros Fund Management (SFM) indicated that it sold millions of Rivian shares during the second quarter.
SFM owns just over 17.835 million shares in Rivian — 17,835,511 Rivian shares to be exact — worth $459 million as of June 30. This is quite unlike the first quarter, the period during which Soros acquired additional shares in Rivian while Ford acquired (F) another major contributor to the group with Amazon (AMZN) also sold millions of shares.
As of March 31, SFM owned just over 25.88 million shares of Rivian.
Shares of Rivian continued to decline in the second quarter, losing 49% of their value between April 1 and June 30. Since the beginning of the year, Rivian’s stock is down 62.5%.
The Irvine, California-based company has a busy roadmap for the next 18 months: improving and enhancing its R1T truck/truck and R1S SUV, as well as its electric delivery truck, EDV.
The blow was harder for Rivian as Soros first invested in Tesla and Ford. The billionaire also cemented his position in Lucid (LCID) and new (NIO) two of Rivian’s other competitors are also in the process of increasing production rates.
It is difficult to determine whether the legendary investor’s decision suggests that he is beginning to become suspicious of Rivian or whether he simply wants to diversify his investments in the electric car sector by betting on different players.
Stock market regulations require fund managers with more than $100 million worth of US stocks to file a document, known as a 13F, within 45 days of the end of the quarter to list their holdings in stocks that are traded on US stock exchanges.
The value of Soros’ US equity portfolio rose 5.3% on a quarterly basis to $5.6 billion. Soros Fund Management is a family office that manages public and private equity.
Soros, who has an estimated net worth of around $8.5 billion as of August 12 according to the Bloomberg Billionaires Index, is known for pouring money into charitable efforts. Most of his company’s assets belong to the Open Society Foundations, which support “people around the world who work for justice, equity, and freedom of expression.”