Why Rivian and Palantir are falling in Monday’s stock market crash

Investors are dealing with a change in market mood that many have never seen before. For years, the mindset on Wall Street has been that when share prices fall, it’s a good time to buy. However, that approach hasn’t delivered the quick results it did for much of the 2010s, and that’s leaving many market participants at a loss as to what to do. That has helped contribute to continued losses in major market benchmarks that continued into Monday morning. As of 7:30 am, futures on the Dow Jones Industrial Average (^ DJI 0.00%) they dropped 541 points to 32,268. S&P 500 (^GSPC -3.20%) futures had fallen 82 points to 4,038, while Nasdaq Composite (^IXIC 0.00%) futures had fallen 312 points to 12,384.

A couple of individual stocks stood out with declines even larger than the broader market. The fall of the shares of the specialist in electric vehicles rivian automotive (RIVN -20.88%) it had little to do with fundamental business performance, but nonetheless hit shareholders hard. In the meantime, Palantir Technologies (PLTR -21.31%) reported its latest financial results and its investors did not find everything they wanted to see in the report. Below, you will learn more about both companies.

Selling pressure on Rivian?

Shares of Rivian Automotive fell almost 16% in premarket trading on Monday. The news came as ordinary investors pondered what those who stepped in on the ground floor to invest in the electric truck specialist might do with their shares.

Image source: Rivian Automotive.

Rivian had its initial public offering (IPO) in November 2021, and among its early investors were Amazon Y ford motor company, all of whom took double-digit percentage stakes in the company. As is often the case with IPOs, these and other early investors were subject to lock-in provisions that prevented them from immediately selling shares once Rivian went public.

However, that six-month lock-up period expired over the weekend, and reports emerged that Ford immediately tried to sell about 8 million shares of the more than 100 million Rivian shares it owns. With such large blocks of shares, it’s typical for investment bankers to require sellers to take a discount, and that’s apparently the case here. It’s also possible that Ford isn’t the only big stock seller, especially given the increased downward pressure on stocks.

Rivian’s rise and fall have been painful for shareholders and have had an impact on the financial results Ford and Amazon have released since the IPO. If today’s major investors really are dumping parts of their holdings at current levels, their belief in Rivian’s ability to stand out from its competition is called into question.

Palantir deals with disappointment

Meanwhile, shares of Palantir Technologies fell 13% in premarket trading on Monday morning. The data analytics company reported its latest financial results before the market opened, and investors were not pleased with what they saw.

Palantir’s results for the first quarter still showed considerable growth. Overall revenue was up 31% year-over-year to $446 million, and sales from the commercial side of its business were up 54% from prior year levels. Government-related revenue was up just 16% from 12 months ago, but Palantir has seen a huge influx of customers as customer numbers grew 86%.

However, from a bottom line standpoint, Palantir remained in low gear. The company lost $101 million in the quarter, or $0.05 per share, and even after accounting for one-time items, adjusted earnings were just $0.02 per share.

Palantir shares have been caught up in the downdraft of high-growth tech stocks in general, and today’s move only added to the negative sentiment on the stock. Despite the potential for further growth in the future, investors are focusing more on short-term factors to push share prices lower once again for Palantir.

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