SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Rivian Automotive, Inc. of Class Action Lawsuit and Upcoming Deadline – RIVN – Press Release
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NEW YORK, April 28, 2022 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Rivian Automotive, Inc. (“Rivian” or the “Company”) RIVN and certain of its officers and directors. The class action, filed in the United States District Court for the Central District of California, and docketed under 22-cv-00829, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Rivian common stock between November 10, 2021 and March 10, 2022, inclusive (the “Class Period”), and all persons and entities who purchased Rivian common stock pursuant and/or traceable to the Registration Statement (defined below) issued in connection with Rivian’s November 2021 initial public offering (the “IPO”). This action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) against Rivian and certain of the Company’s officers and directors.
If you are a shareholder who purchased or otherwise acquired Rivian common stock during the Class Period, or pursuant and/or traceable to the Registration Statement issued in connection with the IPO, you have until May 6, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Rivian is a Delaware corporation with principal executive offices in Irvine, California, that designs, develops, and manufactures electric vehicles (“EVs”), including an electric SUV (the “R1S”) and an electric pickup truck (the “R1T”).
On October 1, 2021, Rivian filed a registration statement for the IPO on Form S-1, which, after several amendments, was declared effective on November 9, 2021 (the “Registration Statement”). On November 9, 2021, Rivian issued the prospectus for the IPO on Form 424B4, which incorporated and formed part of the Registration Statement.
In connection with the IPO, Rivian offered and sold 175,950,000 shares of its common stock at a price to the public of $78.00 per share, which included the exercise in full by the IPO underwriters of their option to purchase an additional 22,950,000 shares of the Company’s common stock. The gross proceeds to the Company from the IPO were $13,724,100,000, before deducting underwriting discounts and commissions, and estimated offering expenses payable by the Company.
In the Registration Statement, Defendants represented, among other things, that Rivian had 55,400 combined preorders for the R1T and R1S, and that Rivian planned to “produce approximately 1,200 R1Ts and 25 R1Ss and deliver approximately 1,000 R1Ts and 15 R1Ss” by the end of 2021.
The complaint alleges that in the Registration Statement and throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Rivian would not meet its 2021 production and delivery targets; (ii) Rivian’s vehicles were underpriced and the Company would need to substantially increase prices; and (iii) as a result, Defendants’ representations about the Company’s business, operations, and prospects lacked a reasonable basis.
The truth about Rivian’s production capabilities and business prospects began to emerge on December 16, 2021, when Rivian disclosed that it would fall “a few hundred vehicles short of [its] 2021 production target of 1,200 [vehicles].” In addition to admitting that production was lagging, Defendant Robert J. Scaringe (“Scaringe”)—the Company’s Founder, Chief Executive Officer, and Chairman—acknowledged that Rivian’s vehicles were “very aggressively priced” and that, against “the backdrop of inflation,” the Company was “look[ing] at [their] pricing.”
On this news, Rivian’s stock price fell $11.17 per share, or more than 10%, from a close of $108.87 per share on December 16, 2021, to close at $97.70 per share on December 17, 2021.
On January 10, 2022, Rivian confirmed that it had only “produced 1,015 vehicles by the end of 2021” and that only “920 vehicles were delivered by that date.”
Additional corrective information surfaced on March 1, 2022, when Rivian announced that it would dramatically increase the starting price of the R1T by about 17% (to approximately $79,000 from $67,500), and the R1S by about 20% (to approximately $84,500 from $70,000). Notably, these price changes would apply not only to future orders, but also to existing preorders (many of which had been placed as long as three or more years prior). According to Defendant Jiten Behl (“Behl”), the Company’s Chief Growth Officer, the price increases were the result of “inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips).”
In a swift and fierce backlash, media outlets reported that many Rivian customers reported that they had cancelled, or planned to cancel, their preorders as a result of the dramatic price hikes.
On this news, Rivian’s stock price fell $8.35 per share, or more than 13%, from a close of $61.91 per share on March 1, 2022, to close at $53.56 per share on March 2, 2022.
Just two days later, on March 3, 2022, Defendants retracted aspects of the price increases, now announcing that preorders that had been placed before March 1, 2022, would not be subject to the new prices, and that customers who had cancelled their preorders could reinstate their orders at the original prices. Defendant Scaringe admitted that applying the price increases to existing preorders was “wrong” and “broke [customers’] trust in Rivian.”
On this news, Rivian’s stock price fell an additional $2.65 per share, or approximately 5%, from a close of $53.56 per share on March 2, 2022, to close at $50.91 per share on March 3, 2022.
Then, on March 10, 2022, Rivian announced disappointing financial results for the fourth quarter of fiscal year 2021, including revenue and adjusted losses per share that fell far below analysts’ estimates. Additionally, while analysts had expected Rivian to produce 40,000 vehicles in 2022, Defendants disclosed that the Company expected to produce only 25,000 vehicles in 2022.
On this news, Rivian’s stock price fell $3.11 per share, or approximately 7.5%, from a close of $41.16 per share on March 10, 2022, to close at $38.05 per share on March 11, 2022.
Critically, Defendants’ December 2021 and March 2022 admissions corroborate allegations raised a week prior to the IPO by Laura Schwab (“Schwab”), a former Rivian executive who had sued the Company for gender discrimination and alleged that senior executives had been warned of production issues and that “it was clear that the [Company’s] vehicles were underpriced, and each sale would result in a loss [for] the [C]ompany.” Schwab also alleged in her November 4, 2021 lawsuit that she had reported her pricing concerns to other Rivian executives beginning in the spring of 2021, including Defendant Behl, who initially “brushed her off” but eventually agreed that the Company “would need to raise the vehicle prices after the IPO.”
As of the time the complaint was filed, the price of Rivian common stock continued to trade below the $78.00 per share IPO price, damaging investors.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
888-476-6529 ext. 7980
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