Rivian's $5 Billion VW Deal

Plus, FedEx cuts spending forecast.

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Today is Wednesday, June 26, 2024.

The Early Bird Index today is 74.47.

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Rivian's $5 Billion VW Deal

Electric vehicle maker Rivian Automotive (Nasdaq: RIVN) surged by 49.92% (wow!) in after-hours trading on Tuesday after forming a joint venture with Volkswagen (OTCMKTS: VWAPY) worth up to $5 billion.

Details: Volkswagen will invest $1 billion through an unsecured convertible note that could convert into Rivian’s stock. Volkswagen will invest another $4 billion through multiple tranches in future years. The deal is expected to close by the end of 2024.

Background: Rivian needs this partnership to work. Bad earnings results have hit the stock. The company also lowered its output for the year.

Stock Price: Rivian is down 43% this year, par for the course for electric vehicles in 2024.

Early Bird’s Nest Egg Gains: Demand for EVs has slowed in the past year due to lower consumer spending, concern about the lack of charging stations, and uncertainty around government policies in an election year.

  • Americans bought 15.2% fewer EVs in the first quarter of 2024 than in the last quarter of 2023, according to Kelley Blue Book.

  • Last year, Rivian made up just 3.7% of the U.S. EV market, according to MarketWatch.

Final Thoughts: Rivian has more to gain from this partnership than Volkswagen, although the deal is positive for both companies.


Notable Earnings Today: Micron Technology (Nasdaq: MU), Levi Strauss (NYSE: LEVI), Paychex (Nasdaq: PAYX), General Mills (NYSE: GIS), UniFirst (NYSE: UNF), Concentrix (Nasdaq: CNXC), AeroVironment (Nasdaq: AVAV), H.B. Fuller (NYSE: FUL), MillerKnoll (Nasdaq: MLKN), Blackberry (NYSE: BB), Franklin Covey (NYSE: FC), Jefferies Financial Group (NYSE: JEF), Worthington Steel (NYSE: WS).

Notable IPOs Today: Graf Global Corp. (NYSE American: GRAF).

Notable Equity Crowdfunding Campaigns Ending Today: N/A.

Notable Economic Events Today: Building Permits (8:30 a.m. ET), New Home Sales (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET), Fed Bank Stress Test Results (4:30 p.m. ET).

FedEx Cuts Spending Forecast

FedEx (NYSE: FDX) climbed 13.89% in after-hours trading on Tuesday after the transportation giant posted strong financial earnings results.

Earnings: FedEx reported earnings of $5.41 per share in the past quarter and revenue of $22.1 billion; both were better than expected.

Powering the Story: Capital spending for the fiscal year dropped 16% from $6.2 billion to $5.2 billion. FedEx expects permanent cost reductions of $2.2 billion in the upcoming fiscal year.

Also: FedEex is evaluating its freight business. The company might sell it someday. Rival UPS (NYSE: UPS) did the same thing with its logistics business on Sunday.

Final Thoughts: FedEx was only up 1.64% this year. The reduced spending could turn the stock around.

Solana’s New Features

Solana ticked up about 3% on Tuesday after the Solana Blockchain added new features to make transactions more accessible.

Final Thoughts: Solana is up 30% this year but down 18% in the last 30 days due to weakness in the cryptocurrency market.

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.