Adding Rivian (RIVN) Stock to My Portfolio

Today I decided to add Rivian stock to my portfolio.

Since Rivian IPO’ed last year, its stock price has experienced enormous volatility. The IPO price on November 10, 2021 was $78 but it soon shot up to and peaked at $179.47 just a week later on November16, 2021.

It’s been mostly downhill since then. It it high a 52-week low of $50 on January 28, 2022. It has recovered somewhat since and closed at $60.87 today. That’s about 20% higher than the 52-week low but still 23% below the IPO price.

The fact that it’s so far below the IPO price is one factor that piqued my interest in the stock but there’s more to it.

If you are following the market, you are no doubt that aware that Amazon stock went up 13.54% today after releasing an extremely favorable earnings report.

Of course, Amazon is a major investor in Rivian and its fourth quarter earnings report included a $11.8 billion gain in the value of its Rivian holding. Thus holding Rivian stock past the IPO contributed to its higher net income.

However, that was not what made a difference for me. After all, if Amazon is using mark-to-market accounting to report a pre-tax gain, it will also need to report a loss on its Rivian stock in the next earnings report, assuming the current Rivian stock price holds until then.

No, what really struck me was an earlier report from Amazon a day earlier when it announced that it had actually increased its investment in Rivian. Amazon bought more shares and it now holds a stake representing 18.1% of the electric car maker.

That’s a vote of confidence from a company that has proven itself to be quite adept with its investments.

For now I’m planning to keep this as a long-term investment.