Shareholder Litigation: Rivian Accused Of Misleading Investors About Vehicle Prices
According to a report from Reuters, Rivian Automotive Inc—an electric vehicle manufacturer based in Irvine, California—is facing a shareholder lawsuit for allegedly misleading investors about the pricing of its vehicles. The shareholder is seeking class action certification for the lawsuit. In this blog post, our West Palm Beach shareholder disputes attorneys explain some of the key things to know about the proposed class action shareholder lawsuit filed against Rivian.
A Strong IPO Followed By Questions About the Value of the Business
Rivian was founded by Robert “RJ” Scaringe in 2009. Despite being a new player in the electric vehicle market with relatively little revenue, Rivian has seen strong interest from Wall Street. Through the company’s November 2021 initial public offering (IPO) it raised more than $12 billion from investors. At the close of the first day of public trading on the Nasdaq, Rivian closed at just under $130.00 per share. As of March 17th, 2022, the company’s stock price is below $40.00.
A significant percentage of the fall came over the last few weeks. The stock dropped by more than 33 percent following its March 1st, 2022 announcement that it was raising prices. At that time, the company announced a more than 10 percent hike in the price of its two most well-known electric vehicle models, the R1S and the R1T. There was sharp public backlash to the proposed price hike. Within 48 hours, Rivian reversed itself—canceling the decision. However, the stock did not rebound.
Allegations: Shareholders Were Misled About the Sustainability of the Company’s Pricing
In a California federal court, a proposed class action shareholder lawsuit has been filed against Rivian on the grounds that it materially misrepresented the sustainability of its electric vehicle pricing model to investors.
Charles Larry Crews, the shareholder leading the charge against the company, contends that Rivian intentionally failed to tell its investors that it was underpricing its fleet of electric vehicles. He claims that the underpricing led to the unpopular (and quickly reversed) attempted price hike and that it indicates that the electric vehicle manufacturer is in a far less strong financial position than it represented to investors.
This matter is currently pending before a federal court in San Francisco. It will be up to the court to determine if a class action certification is appropriate in this case. As with all shareholder lawsuits, the specific facts of the case always matter. Rivian has not provided any public comment citing pending litigation.
Contact Our West Palm Beach, FL Shareholder Dispute Lawyers Today
At Pike & Lustig, LLP, we have deep experience representing clients in shareholder litigation. If you have any questions about the alleged misleading of investors by corporate officers, we are more than ready to help. Call us now for a confidential assessment of your case. Our firm provides shareholder representation throughout South Florida, including in West Palm Beach, Palm Beach Gardens, Jupiter, Fort Lauderdale, Coral Springs, Parkland, Miami, Miami Beach, and Hialeah.