After Rivian Automotive (RIVN -0.66%) went public in November 2021 at an initial public offering (IPO) price of $78 per share, investors poured in and drove shares up over $170. That gave the company a market cap of more than $150 billion before it even started bringing in any real revenue.
But some of the shine has worn off the name, and the stock has been getting hit particularly hard this week. As of Friday morning, Rivian shares were down 20% for the week, according to data provided by S&P Global Market Intelligence.
One of the major appeals that the newly public company had for investors was its relationship with early investor and future customer, Amazon.com (AMZN -0.59%). The e-commerce giant led a $700 million investment round in Rivian in 2019 and has agreed to purchase up to 100,000 electric-delivery vans from the electric-vehicle (EV) maker. But EV competition is also ramping up, and news this week that Amazon is also partnering with another EV maker now has some investors selling Rivian stock.
The stock has been trending down over the last month. General market sentiment has hit many growth stocks as investors prepare for a rising interest-rate environment. But Rivian shares took the biggest hit after Amazon said it would also partner with Fiat-Chrysler parent Stellantis to purchase electric commercial vans.
The fact that Amazon will not have an exclusive relationship with Rivian spooked many investors who counted that partnership as a unique catalyst for the EV start-up. But Amazon said that the newly announced relationship with Stellantis doesn't change its plans with Rivian.
Amazon said it always expected to have multiple electric-delivery van suppliers to satisfy its last-mile delivery needs. In an email to CNBC, an Amazon spokesperson added: "We continue to be excited about our relationship with Rivian, and this doesn't change anything about our investment, collaboration, or order size and timing."
Widely followed Morgan Stanley analyst Adam Jonas recently reaffirmed his bullishness on Rivian. In a note shared by InvestorPlace, Jonas called Rivian his No. 2 top automobile stock to own for 2022. He cites the Amazon relationship as one of the main reasons.
If the news that Amazon will also buy EVs elsewhere truly doesn't change that partnership, investors may be jumping out of the stock this week for the wrong reasons. There are plenty of risks, including growing competition, but Rivian's future Amazon business appears to remain intact.