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Shares of Rivian are in the spotlight today following an insider purchase from Director Jay Flatley. Since its initial public offering (IPO) in November, RIVN stock has lost about 70% of its value.
Rivian expects to manufacture 25,000 vehicles this year. That figure was cut in half from 50,000 vehicles, as the electric vehicle (EV) company deals with supply-chain delays and shortages. Specifically, Rivian has had issues acquiring semiconductors and wire harnesses. CEO RJ Scaringe expects these issues to persist until 2023.
During May, Rivian insiders bought shares for the first time since Novemeber. Flatley wasn’t the only person to purchase shares this month, either; Scaringe also made a $1 million purchase.
Director Jay Flatley Buys RIVN Stock
On May 26, Flatley purchased 40,000 shares of RIVN stock at an average price of $29.31 per share. After the purchase, the director owns 92,616 shares of the company.
Flatley did not enact this transaction via a prearranged 10b5-1 trading plan. Many company insiders use that kind of plan to avoid accusations of trading on material, non-public information. However, transactions initiated without the plan provide more value than transactions initiated with it. This is because an immediate, non-planned purchase suggests an insider sees value in their company at the current moment.
Like Flatley, CEO RJ Scaringe also purchased shares of RIVN stock this month. On May 16, the CEO purchased 41,000 shares at an average price of $25.77. Scaringe did not initiate this trade via a 10b5-1 trading plan either. After the transaction, the CEO directly owns 169,175 shares. He also indirectly owns 4.34 million shares through a trust and a limited liability company (LLC).
While Scaringe and Flatley bought shares in May, Ford (NYSE:F) took another route and sold RIVN stock. Rivian’s IPO lockup expired earlier this month, so Ford took the opportunity to unload 15 million shares. On May 9, the company sold 8 million shares at an average price of $26.80 per share. Four days later, the legacy automaker sold another 7 million shares at an average price of $26.88 per share. After the sales, Ford still owns roughly 86.95 million shares.
Coinciding with the recent insider purchases is a buy recommendation from Mizuho analyst Vijay Rakesh. Rakesh is a highly regarded analyst and ranks 76 out of 7,945 analysts on TipRanks. The analyst has an $80 price target for RIVN and averages a 23.3% annual return for his recommended stocks.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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