RIVN Stock Alert: Why Is Rivian Under Pressure Today?

Shares of electric vehicle maker Rivian (NASDAQ:RIVN) stock are sinking today after reports surfaced that the company may miss its production targets and its chief operating officer has stepped down.

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RIVN fell as much as 3% this morning to $79.27 per share on the pessimistic news. Today’s decline brings the total decrease in shares to 30% over the past month.

In the last five trading sessions alone, Rivian stock has fallen 21%, making it one of the worst performers in the technology-laden Nasdaq. News that company COO Rod Copes has left the company after nearly two years in the senior executive role is exacerbating the slump in Rivian’s stock price.

What’s Going on With RIVN Stock?

In a written statement, Rivian said that Rod Copes “began a phased retirement from Rivian several months ago, affording the team continuity as we moved toward production ramp.” His duties have been distributed across the leadership team, the company added. Copes’ departure comes after Rivian announced in December that it would fall “a few hundred vehicles short” of its goal to build 1,200 vehicles this year.

Rivian reported yesterday that it produced 1,015 vehicles last year. It delivered 920 to customers.

Perhaps most damaging to RIVN stock has been news last week that Amazon (NASDAQ:AMZN), a major early investor in Rivian, said it would buy some of its electric delivery vans from Rivian rival Stellantis (NYSE:STLA). Amazon had been seen as a key backer and client of Rivian and its move away from the EV maker has been viewed as an extremely negative development. Amazon had previously announced an order of 100,000 electric delivery vans from Rivian.

Why It Matters

Rivian is now dealing with a slew of negative news. Canceled orders, missed production targets and the departure of a key executive all give the impression of a company in trouble. The mounting issues come two months after Rivian held its record-breaking initial public offering. After running up to just under $180 a share, RIVN stock has since fallen as much as 58% due to the negative attention. Last week, shares of the company fell as low as $75, below the company’s IPO price of $78.

Shortly after its IPO, Rivian briefly had a market capitalization of $100 billion, which was greater than established U.S. automakers General Motors (NYSE:GM) and Ford (NYSE:F). At the time of its market debut, many Wall Street analysts had said that Rivian was one of the most likely contenders to challenge electric vehicle leader Tesla (NASDAQ:TSLA). That narrative appears to now be unravelling.

What’s Next for Rivian?

Until the company manages to get its vehicle production on track, and find a permanent replacement for its COO, RIVN stock is likely to continue trending lower. Investors would be well advised to steer clear of Rivian until it manages to counter the negative media reports that continue to swirl around it and pull down its stock.

On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.