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Ford Gets Rid of Rivian

The Dearborn, Mich., veteran automaker has lost patience and sold most of its Rivian shares.

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4 months ago

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The Dearborn, Mich., veteran automaker has lost patience and sold most of its Rivian shares.

The year 2022 was a nightmare for the shareholders of the upstart electric-vehicle maker Rivian. 

The stock fell 82.2%, which translated to $75.3 billion wiped out. 

Many retail investors have seen their stock investments deteriorate. And for institutional investors, the Rivian  (RIVN) - Get Free Report bet has also turned disastrous.

Rivian went public in November 2021, and the stock then rose as high as $180, which was clearly gold for early shareholders like e-commerce giant Amazon  (AMZN) - Get Free Report and automaker Ford.  (F) - Get Free Report

Moreover, in 2021, their interests in the manufacturer of the R1T electric pickup had helped boost their profits. 

But Rivian's missteps and self-inflicted wounds last year completely changed the narrative around the firm. 

For example, at the end of February, the company raised prices on its R1T electric pickup truck, by 17%, and its R1S SUV, by 20%, due to higher materials costs and chip shortages. But it applied the increases to all customers, both new and those who had already placed their orders.

In the face of an outcry and cancellations, the CEO at the time, RJ Scaringe, apologized. "We wrongly decided to make these changes apply to all future deliveries, including preexisting configured preorders," he said.

To this must be added the continued pandemic-related supply-chain disruptions, which have caused the automobile group's costs to soar. 

This cocktail has complicated Rivian's effort to mass-produce its vehicles.

Ford Sold Most of Its Rivian Shares

Now, some investors have lost patience. Ford, the Dearborn, Mich., auto-production stalwart, has sold almost all its stake in Rivian.

Ford  (F) - Get Free Report sold 3.8 million shares of Rivian in the fourth quarter. In all of 2022, the company, which initially held 101.9 million Rivian shares, or 12% of the capital, sold 91 million Rivian shares, according to regulatory filings. Ford now owns only 11 million Rivian shares.

The Dearborn group made a good deal but could have won more. Here's how:

Ford had invested $1.2 billion in Rivian. The sale of the 91 million Rivian shares netted the company $3 billion, a gain of $1.8 billion. But given the surge in Rivian stock in the first months after its IPO, Ford could have sold at even higher prices -- but the stock market crash last year thwarted Ford's plans.

"The monetization of our Rivian stake ... is now nearly complete," Chief Executive Jim Farley told analysts during the fourth-quarter-earnings call on Feb. 2.

Ford seems in a hurry to turn the Rivian page it opened in 2019. At the time the two automakers envisaged that the legacy carmaker would manufacture a vehicle on the Rivian's Skateboard platform. That's the base on which Rivian's R1S SUV is being developed. 

But these plans never materialized. 

Ford began to withdraw from Rivian last May, selling 25.2 million shares for $700 million, according to regulatory filings. The company then sold 51.9 million shares in the third quarter for $1.8 billion.

Rivian

Amazon Stands Pat on Rivian

This change in strategy came after the stake in Rivian began to prompt impairment charges on Ford's balance sheet.

"We recorded $12.2 billion of pretax special-item charges in 2022, driven by a $7.4 billion mark-to-market net loss on our Rivian investment and a $2.7 billion impairment on our Argo investment," Ford explained in its last annual report.

Argo refers to Argo AI, a subsidiary developing autonomous technologies, of which Volkswagen  (VLKAF)  was also a major shareholder. Last October, Ford decided to withdraw its support to the firm, which was then forced to close.

Even if Rivian is about to lose Ford, the Irvine, Calif., automaker can still count on Amazon  (AMZN) - Get Free Report.

The e-commerce giant has not sold Rivian shares, even as the value of its stake in Rivian has lost ground. In the fourth quarter, for example, the pretax loss linked to its Rivian's holdings was $2.3 billion. In Q4 2021, Amazon had recorded a pretax gain of $11.8 billion linked to its stake in Rivian.

Amazon held a 17.34% stake in Rivian as of Dec. 30, according to FactSet.

The partnership between the two companies also extends to a commercial relationship, while Ford is Rivian's rival. Amazon has placed a gigantic order for the EDV, the commercial van developed by Rivian. 

The upstart currently produces the R1S SUV, the R1T pickup/truck and the EDV van, all at its Normal, Ill., plant.

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“What’s More Tragic Is Capitalism”: BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

"What’s More Tragic Is Capitalism": BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

Authored by Jonathan Turley,

Two years…

Published

13 hours ago

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May 28, 2023

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"What's More Tragic Is Capitalism": BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

Authored by Jonathan Turley,

Two years ago, I wrote columns about companies pouring money into Black Lives Matter to establish their bona fides as “antiracist” corporations. The money continued to flow despite serious questions raised about BLM’s management and accounting. Democratic prosecutors like New York Attorney General Letitia James showed little interest in these allegations even as James sought to disband the National Rifle Association (NRA) over similar allegations. At the same time, Black Lives Matter co-founder Patrisse Cullors cashed in with companies like Warner Bros. eager to give her massive contracts to signal their own reformed status. It now appears that BLM is facing bankruptcy after burning through tens of millions and Warner Bros. cut ties with Cullors after the contract produced no — zero — new programming.

Some states belatedly investigated BLM as founders like Cullors seemed to scatter to the winds.

Gone are tens of millions of dollars, including millions spent on luxury mansions and windfalls for close associates of BLM leaders.

The usual suspects gathered around the activists like former Clinton campaign general counsel Marc Elias, who later removed himself from his “key role” as the scandals grew.

When questions were raised about the lack of accounting and questionable spending, BLM attacked critics as “white supremacists.”

Warner Bros. was one of the companies eager to grab its own piece of Cullors to signal its own anti-racist virtues.  It gave Cullors a lucrative contract to guide the company in the creation of both scripted and non-scripted content, focusing on reparations and other forms of social justice. It launched a publicity campaign for everyone to know that it established a “wide-ranging content partnership” with Cullors who would now help guide the massive corporation’s new programming. Calling Cullors “one of the most influential thought leaders in American public life,” Warner Bros. announced that she was going to create a wide array of new programming, including “but not limited to live-action scripted drama and comedy series; longform/event series; unscripted docuseries; animated programming for co-viewing among kids, young adults and families; and original digital content.”

Some are now wondering if Warner Bros. ever intended for this contract to produce anything other than a public relations pitch or whether Cullors took the money and ran without producing even a trailer for an actual product. Indeed, both explanations may be true.

Paying money to Cullors was likely viewed as a type of insurance to protect the company from accusations of racial insensitive. After all, the company was giving creative powers to a person who had no prior experience or demonstrated talent in the area. Yet, Cullors would be developing programming for one of the largest media and entertainment companies in the world.

One can hardly blame Cullors despite criticizism by some on the left for going on a buying spree of luxury properties.

After all, Cullors was previously open about her lack of interest in working with “capitalist” elements. Nevertheless, BLM was run like a Trotskyite study group as the media and corporations poured in support and revenue.

It was glaringly ironic to see companies like Warner Bros. falling over each other to grab their own front person as the group continued boycotts of white-owned businesses. Indeed, if you did not want to be on the wrong end of one of those boycotts, you needed to get Cullors on your payroll.

Much has now changed as companies like Bud Light have been rocked by boycotts over what some view as heavy handed virtue signaling campaigns.

It was quite a change for Cullors and her BLM co-founder, who previously proclaimed “[we] are trained Marxists. We are super versed on, sort of, ideological theories.” She denounced capitalism as worse than COVID-19. Yet, companies like Lululemon rushed to find their own “social justice warrior” while selling leggings for $120 apiece.

When some began to raise questions about Cullors buying luxury homes, Facebook and Twitter censored them.

With increasing concerns over the loss of millions, Cullors eventually stepped down as executive director of the Black Lives Matter Global Network Foundation, as others resigned.  At the same time, the New York Post was revealing that BLM Global Network transferred $6.3 million to Cullors’ spouse, Janaya Khan, and other Canadian activists to purchase a mansion in Toronto in 2021.

According to The Washington Examiner, BLM PAC and a Los Angeles-based jail reform group paid Cullors $20,000 a month. It also spent nearly $26,000 on meetings at a luxury Malibu beach resort in 2019. Reform LA Jails, chaired by Cullors, received $1.4 million, of which $205,000 went to the consulting firm owned by Cullors and her spouse, according to New York magazine.

Once again, while figures like James have spent huge amounts of money and effort to disband the NRA over such accounting and spending controversies, there has been only limited efforts directed against BLM in New York and most states.

Cullors once declared that “while the COVID-19 illness is tragic, what’s more tragic is capitalism.” These companies seem to be trying to prove her point. Yet, at least for Cullors, Warner Bros. fulfilled its slogan that this is all “The stuff that dreams are made of.”

Tyler Durden Sun, 05/28/2023 - 16:00

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Biden reaches ‘tentative’ US debt ceiling deal: Report

United States President Joe Biden has urged the United States Congress to “pass the agreement right away.“
Amid growing concerns…

Published

23 hours ago

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May 28, 2023

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United States President Joe Biden has urged the United States Congress to “pass the agreement right away.“

Amid growing concerns of a potential default by early June, United States President Joe Biden and House majority leader Representative Kevin McCarthy have reportedly reached an “agreement in principle” to raise the federal government’s multitrillion-dollar debt ceiling.

According to a May 28 report from Reuters citing two sources familiar with the negotiations, the “tentative” agreement to raise the $31.4 trillion debt ceiling was reached after a 90-minute phone call between Biden and McCarthy on May 27.

Since publication time, Biden has confirmed via Twitter the existence of an “agreement in principle," explaining that it will prevent the U.S. from facing a “catastrophic default.“

Biden noted that “over the next day,” the agreement would go to the U.S. House of Representatives and Senate. He urged both chambers to “pass the agreement right away.“

Meanwhile, McCarthy also took to Twitter to confirm the agreement in principle, alleging that Biden “wasted time and refused to negotiate for months.“

Reuters reported that while “the exact details of the deal were not immediately available,” an agreement has been made to limit the U.S. government’s spending for the next two years, excluding expenses related to national security.

“Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025,” a source familiar with the deal said.

Related: Debt ceiling crisis: Best practices to navigate this market

This comes only weeks after U.S. Treasury Secretary Janet Yellen warned of a default risk as soon as June 1 if the debt limit isn’t suspended or raised, urging Congress to “act as soon as possible.“

Additionally, The U.S. Congressional Budget Office published a report on May 12, emphasizing that if the debt limit remains unchanged, there is a significant risk “that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.“

In recent times, several analysts have shared a similar view that raising the debt ceiling could see more capital inflow into Bitcoin (BTC).

On May 17, MacroJack, a former Wall Street trader, warned his followers in a tweet that the U.S. debt ceiling talks are “all show.“

He emphasized how important it is to own hard assets as the dollar will be “printed into oblivion,” while stating that Bitcoin is the “fastest horse in the race.“

Meanwhile, Jesse Myers, chief operating officer of investment firm Onramp, reminded his 50,100 Twitter followers of what happened during the COVID-19 pandemic, stating that “Bitcoin was the winner during the last round of stimulus.“

He proposed the idea that history might repeat itself if the debt ceiling were to be raised, as it would prompt the Federal Reserve to print more money.

Update on May 28, 2023, at 03:15: This article has been updated to include United States President Joe Biden's tweet.

Magazine: Visa stablecoin plan, debt ceiling’s effect on Bitcoin price: Hodler’s Digest, April 23-29

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Biden reaches ‘tentative’ US debt ceiling deal: Report

United States President Joe Biden has urged both the United States House and Senate to "pass the agreement right away."
Amid growing…

Published

1 day ago

on

May 28, 2023

By

United States President Joe Biden has urged both the United States House and Senate to "pass the agreement right away."

Amid growing concerns of a potential default by early June, the United States President Joe Biden and Republican Kevin McCarthy have reportedly reached an "agreement in principle" to raise the federal government's multi-trillion dollar debt ceiling.

According to a May 28 report from Reuters, citing two sources familiar with the negotiations, the "tentative" agreement to raise the $31.4 trillion debt ceiling was reached after a 90-minute phone call between Biden and McCarthy on May 27.

Following the publication of this article, Biden has since confirmed via Twitter the existence of an "agreement in principle," explaining that it will prevent the U.S. facing a "catostrophic default."

Biden noted that "over the next day," the agreement will go the U.S. House and Senate. He urged both chambers to "pass the agreement right away."

Meanwhile, McCarthy also took to Twitter to confirm the agreement in principle, alleging that Biden "wasted time and refused to negiotate for months."

Reuters reported that while "the exact details of the deal were not immediately available," an agreement has been made to limit the U.S. government's spending for the next two years, excluding expenses related to national security. 

"Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025" a source familiar with the deal said.

Related: Debt ceiling crisis: Best practices to navigate this market

This comes only weeks after U.S. Treasury Secretary Janet Yellen warned of a default risk as soon as June 1 if the debt limit isn't suspended or raised, urging Congress to "act as soon as possible."

Additionally, The U.S. Congressional Budget Office (CBO) published a report on May 12, emphasizing that if the debt limit remains unchanged, there is a significant risk "that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations."

In recent times, several analysts have shared a similiar view that raising the debt ceiling could see more capital inflow into Bitcoin (BTC)

MacroJack, a former Wall Street trader, warned his followers in a tweet on May 17 that the U.S. debt ceiling talks are "all show."

He emphasized how important it is to own hard assets as the dollar will be "printed into oblivion," while stating that Bitcoin is the "fastest horse in the race."

Meanwhile, Jesse Myers, chief operating officer of investment firm Onramp reminded his 50,100 Twitter followers of what happened during the Covid-19 Pandemic, stating that "Bitcoin was the winner during the last round of stimulus."

He proposed the idea that history might repeat itself if the debt ceiling were to be raised, as it would prompt the Federal Reserve to print more money.

Update on May 28, 2023, at 03:15: This article has been updated to include United States President Joe Biden's tweet.

Magazine: Visa stablecoin plan, debt ceiling’s effect on Bitcoin price: Hodler’s Digest, April 23-29

Read More

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