With many growth stocks seeing declines today, the roughly 2% decline in shares of Rivian (NASDAQ:RIVN) may be unsurprising to some. That said, there’s reason why RIVN stock is on watch, as investors look at EV stocks amid the recent downturn.
Currently, reports are circulating that Rivian is looking to accelerate its production plans. Via a reorganization plan expected to be announced soon, key employees at the company may be asked to relocate to its Illinois plant in a bid to boost production.
On the face, this news certainly seems to be bullish. Rivian is looking to capture as much market share as possible and produce enough cars to meet its existing demand. Additionally, the company appears to believe that forward-looking demand may be better than anticipated.
Let’s dive into what to make of today’s move with RIVN stock.
RIVN Stock Dips Amid Restructuring Rumors
At the time of this writing, Rivian hasn’t made any formal announcements about this news. A Wall Street Journal report indicated this was likely to be the case, however, with other major outlets already reporting the story as well.
That said, the ultimate impact this shift will have on Rivian’s future prospects is what investors care most about. The company appears to be intent on improving its manufacturing and engineering processes with its existing production. Accordingly, having its key staff closer to the front lines is a move that management seems to think is critical to Rivian hitting its targets.
Rivian has noted that supply-chain issues and other production-related snarls have been responsible for lower production than anticipated in the past. Thus, perhaps this move is exactly what the doctor ordered.
Still, bears on RIVN stock have noted that demand is deteriorating across the sector. And, given Rivian’s higher-priced pickup trucks, this market could affect the company to a greater degree.
We’ll have to see how everything plays out. Today, it appears investors are looking past this news, focusing more on the macro picture.
On the date of publication, Chris MacDonald did not hold (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 InvestorPlace.com Publishing Guidelines.