The Rivian Automotive Inc (NASDAQ: RIVN) stock price has fallen 19.3% since the year started but is down 43.85% over the past 12 months as investor sentiment towards the EV industry soured. The decline in Rivian’s stock price has led to it being kicked out of the Nasdaq index.
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Rivian is scheduled to be removed from the Nasdaq 100 index next week, with ON Semiconductor taking its place. The company taking Rivian’s place is a semiconductor manufacturer that serves the EV market in a unique turn of events.
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The Nasdaq is set to remove Rivian from the blue-chip index since its weight has been below 0.1% in the market-capitalisation-weighted index for two consecutive months. The index tends to reward companies with rising stock prices that tend to have more weight in the index.
Microsoft and Apple, the two biggest companies on the index Apple and Microsoft both weigh 12% each, with the other companies that make up the index having a lower weight. However, the companies must keep their index weighting above the crucial 0.1% level.
JPMorgan Chase analyst Min Moon, who had warned that Rivian was on the verge of getting kicked off two weeks ago, also correctly predicted its replacement: ON Semiconductor (Onsemi).
Nasdaq will sell all its shares in Rivian and replace them with On Semiconductor’s shares. This could deal another blow to the struggling, money-draining EV company. The troubles facing Rivian are replicated across the entire industry, which has forced many companies to cut their prices.
ON Semiconductors has been doing well after being recognised as a Fortune 500 company in May 2022, after which the company was added to the S&P 500 index a month later. However, the addition to the Nasdaq 100 index came a year after the S&P 500 addition because the Nasdaq 100 is a more exclusive index with just 100 companies instead of 500.
It remains to be seen whether Rivian shares shall recover in future, but the selling of shares by the Nasdaq index is bound to cause its shares to fall.
*This is not investment advice.
Rivian stock price.
The Rivian stock price has fallen 19.31% this year but is down 43.85% during the past 12 months.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.