In a remarkable turn of events, Rivian Automotive, the electric vehicle (EV) manufacturer, has witnessed a significant rebound in its stock prices following a challenging period marked by production and supply obstacles. The company’s stock, listed as RIVN, had experienced a downward spiral since its record-breaking $11.9 billion initial public offering (IPO) in November 2021, plunging to a low of $12.04 on April 26, 2023. However, recent developments have rekindled investor optimism for the EV manufacturer.
Rivian’s resurgence began with an announcement in early July, revealing that the second quarter of 2023 had been the most successful in the company’s history. Notably, Rivian achieved an impressive production figure of 13,992 vehicles, with 12,640 deliveries accomplished during the same period. Moreover, the company reaffirmed its annual production guidance, aiming to manufacture 50,000 units by year-end.
See also: Rivian Achieves Record-Breaking Electric Vehicle Production and Deliveries in Q2 2023
These positive developments have fueled a dramatic surge in Rivian’s stock price, witnessing an extraordinary gain of nearly 90 percent over the past nine trading sessions. On Monday, the stock closed at $25.51, almost doubling its value from June 26, when it stood at $13.45.
Rivian’s optimistic outlook and reaffirmed delivery goals have also led to an upward revision of its price target by Wedbush Securities. The company’s stock received a price target increase from $25 to $30 by Wedbush Securities, reflecting the growing confidence in Rivian’s potential. “Now [they] finally turned the corner, and I think the worst is in the rearview mirror,” stated Dan Ives, an analyst at Wedbush Securities, during an interview with Yahoo Finance on Monday. He further expressed that a valuation of $30 could be considered a base case for the stock.
Despite the recent climb, Rivian’s stock still remains significantly below its IPO high, which soared to nearly $130. Nevertheless, the company’s newfound growth trajectory offers a glimmer of hope for investors.
Apart from Rivian’s strong Q2 2023 results and promising full-year production guidance, the recent upward momentum in the stock can also be attributed to short sellers retreating. Short interest on Rivian presently accounts for 12.34% of the float, as reported by S3 Partners, a data analytics firm. Notably, the majority of the stock’s price appreciation occurred in the past few weeks, leading to a significant reduction in short interest and prompting short sellers to cover their positions.
See also: Rivian Improves Range with Latest Software Update for R1T and R1S Vehicles
According to Reuters, trading activity surrounding Rivian witnessed an upsurge on Monday, with approximately 831,000 Rivian options contracts traded, double its average daily volume. Daniel Kirsch, head of options at Piper Sandler, highlighted that a substantial portion of the options trading involved investors purchasing “super short-dated calls,” a strategy that has significantly contributed to driving Rivian’s shares higher.
As Rivian continues to strengthen its production capabilities and deliver on its targets, the market remains watchful of the company’s progress. The recent surge in stock prices reflects a renewed sense of optimism among investors, providing Rivian with an opportunity to rebuild its position in the EV industry and potentially regain its previous heights.
