Lucid, Rivian shares take a breather after frenzied EV rally

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Nov 17 (Businesshala) – Shares of some high-flying electric vehicle makers retreated on Wednesday, putting the brakes on an upbeat rally that saw them rise in market capitalization despite questions about their business model from legacy automakers such as General Motors. left behind.

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Luxury electric car maker Lucid Group Inc., the most-traded US stock, fell 2% on Wednesday, while Rivian Automotive Inc. dropped 14%, making the company the second most valuable US automaker for the first time since its blockbuster market debut last week. made. ,

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The market value of the Lucid eclipsed that of Ford on Tuesday, when the company said it is confident of producing 20,000 of its upcoming Lucid air sedan in 2022.

Analysts said Rivian’s stellar performance in the initial public offering drove demand for other EV stocks. He said a pullback in Tesla stock following a pullback that saw chief Elon Musk drop his stake for billions of dollars has sparked an appetite for others in the sector as well.

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Tesla shares rose 1.1%, rising for a second day, as investors heeded Musk’s hard news that they sold $973 million in stock to pay taxes after exercising options.

Electric pickup truck maker Kanu rose 10.9% to a five-month high after the company said it would begin US production in the last quarter of 2022, sooner than the previously announced 2023.

Lucid, Tesla and Rivian were among the most discussed stocks on investor-focused website stocktwits.com, prompting interest from small-time investors.

“What you’re seeing when there’s no profitability is unbelievable valuations,” said Stephanie Lang, chief investment officer at wealth management firm Homerick Berg.

“You have to be careful here because there are times when valuations are really stretched and have no basis, it’s going to end badly.”

Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Maju Samuel

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