And it’s official. Rivian (RIVN) will lose its place on the Nasdaq-100 index (NDX) after its inventory worth fell over 90% from its all-time excessive achieved shortly after going public.

Rivian to be faraway from the Nasdaq-100 index

Lower than two weeks after JP Morgan analyst Min Moon predicted in a observe to traders that Rivian would lose its place within the Nasdaq-100, it’s turning into a actuality.

Moon defined that the Nasdaq-100, a inventory market index of the 100 largest nonfinancial firms listed on the change, typically removes the smallest member of the group if the corporate is weighted at lower than 0.1% for 2 straight months.

Rivian was beneath the 0.1% mark on April 28 and Could 31, main Moon to imagine the transfer was inevitable. Moon additionally appropriately predicted the corporate set to switch Rivian: On Semiconductor, which was ranked the highest eligible firm.

Nasdaq confirmed Tuesday it could be changing Rivian with On Semiconductor Corp. (ON) on the Nasdaq-100 index.

Rivian can also be shedding its place within the Nasdaq-100 ESG index, the Nasdaq-100 Equal-Weighted index, and the Nasdaq-100 Ex-Tech sector index. The transfer will occur Tuesday, June 20, 2023.

Regardless of the information, Rivian inventory climbed almost 9% in Tuesday’s buying and selling session, with a number of EV shares additionally rising.

Electrek’s Take

Shedding its spot within the index shouldn’t be an enormous deal for Rivian. Nevertheless, it is very important observe being eliminated means all shares held by the index will likely be bought and changed with the brand new firm (on this case, On Semiconductor).

Though Rivian’s inventory is up almost 20% over the previous month, it’s nonetheless down over 90% from its all-time excessive of over $170 per share, set inside per week of its IPO.

With decrease inventory costs, Rivian, like most EV startups (and unprofitable development shares basically), has misplaced the power to boost low-cost funding by fairness raises. This funding challenge, mixed with rising enter prices, is straining margins.

Regardless of this, Rivian was among the many few automakers to reaffirm its annual manufacturing purpose of fifty,000 models after the primary quarter.

The EV maker produced 9,395 EVs within the first three months of the 12 months whereas delivering 7,946 throughout the identical interval.

CEO RJ Scaringe says driving profitability is simply as vital as ramping manufacturing now after initiating a wave of cost-cutting measures over the previous 12 months or so.

With its second-gen EV fashions (R2), due out in 2026, Rivian expects to considerably enhance margins with a simplified manufacturing course of and elements.