REE Stock: Why Is REE Automotive Plunging 30% Today?

Today, REE Automotive (NASDAQ:REE) is getting hammered. Indeed, shares of REE stock have currently given up approximately one-third of their value. Investors appear to be rising to the exits on this Isreali e-mobility company.

A hand holds an electric vehicle battery charger up to a car.
Source: Shutterstock

As an up-and-coming player in the electric vehicle (EV) space, REE stock has generated some significant buzz. The company’s focus on developing proprietary technology to integrate steering, braking, suspension and other functions in the the arch of the wheel has had many investors excited. After all, improving upon the existing EV technology is a worthwhile goal. REE’s ability to provide added value to an already booming sector is enticing to many investors.

However, as a de-SPAC (special purpose acquisition company), REE stock has battled the usual set of headwinds. Investors seem far less keen on sitting on SPAC or de-SPAC plays today. Indeed, the move to below $6 per share at the time of writing indicates some rather bearish sentiment around this stock.

Let’s dive into what’s driving REE Automotive lower today.

REE Stock Plunges on F-1 Filing

As a foreign company listed on a U.S. exchange, REE is required to file F-1 forms to disclose any share sale. Indeed, any level of insider selling in today’s market (one that only seems to go up) is being viewed extremely negatively by the market. In this case, REE’s recent F-1 filing indicates insiders are content with limiting their exposure to this up-and-coming growth play.

According to the filing, up to 30 million Class A shares and up to 6.4 million sponsor shares have been registered to be sold. What’s intriguing about this sale is the size of the registration. According to the filing, “As of July 31, 2021, we had 229,926,232 Class A Ordinary Shares issued and outstanding.” Accordingly, this F-1 filing stipulates that more than 10% of the outstanding Class A shares have been listed for sale.

This scale of insider selling has certainly caused outsiders to reconsider their exposure to REE stock. Indeed, this announcement has rightly spooked the market. Whether REE stock will ultimately rebound from here remains to be seen. However, investors seem content to wait on the sidelines on this one.

On the date of publication, Chris MacDonald did not have (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 Publishing Guidelines.

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