When Rivian Automotive (RIVN 2.53%) made its debut trading on the public markets on Nov. 10, 2021, early investors were required to hold onto shares for a period of 180 days. With the end of that holding period closing in, Rivian shares have been dropping. Shares have declined 33% in the last month, and dipped as much as much as 4.5% today before paring that drop. As of 1:40 p.m. ET, the stock was down 1.6% on the day.
Large early investors in Rivian include Amazon and Ford Motor Company. They own 160 million and 100 million shares, respectively, representing stakes of about 18% and 11% in Rivian. Those two giants aren't the only owners from prior to the initial public offering (IPO) with shares locked up until the waiting period expires this Monday, May 9.
There's no indication whether the early owners will sell shares once the restriction is lifted. But adding to recent uncertainty, and likely volatility, in the stock is the first-quarter results the company will also be reporting next week on May 11.
Long-term investors should keep their eye on the business progress more than the stock price, especially when stock sales after the lockup period could be unrelated to the company's business. Some early investors may simply want to reap some reward from their pre-IPO stakes.
The first-quarter report will be more substantial for investors. The company reduced its 2022 production estimates in the last quarterly report due to supply chain challenges. The update on that topic will be important to hear. More recently, the company's planned second production facility to be built in Georgia has made progress with the state offering $1.5 billion in incentives for the project.
If the business update has an optimistic tone, investors may even do well to take advantage of the added volatility, and lower stock price, that the share lockup expiration may be providing.