In November 2021, Rivian Automotive raised $11.9 billion in the biggest initial public offering (IPO) of the year, with a share worth $129.95 at the time.
However, Rivian stock (RIVN) has been in free fall ever since amid production and supply woes, reaching a minimum of $12.04 on April 26, 2023. Things appear to be taking a turn for the better, though.
It started in early July when Rivian announced that Q2 2023 was the best quarter in the company's history. The company achieved production of 13,992 vehicles and 12,640 deliveries, and reaffirmed its annual production guidance of 50,000 units.
This has sent the stock soaring by up almost 90 percent over the past nine sessions. Rivian closed at $25.51 on Monday – almost double the closing price of $13.45 on June 26.
The fact Rivian reaffirmed its delivery goals helped the stock get a price target increase to $30 from $25 by Wedbush Securities.
"Production coming out of the gate — it was excuses. It was one step forward, two steps back for four or five quarters. Now [they] finally turned the corner, and I think the worst is in the rearview mirror," Wedbush analyst Dan Ives told Yahoo Finance on Monday. "From a valuation perspective, $30 could be a base case," he added.
Gallery: 2022 Rivian R1T
That's still more than four times lower than the IPO high of almost $130, but at least the stock has started growing again.
Rivian Q2 2023 results and full-year 2023 production guidance aside, the stock's recent upward movement can also be partly attributed to investors who shorted it – i.e. bet that the price would go lower.
Short interest on Rivian currently sits at 12.34% of the float, according to data analytics firm S3 Partners. The company's managing director told Yahoo Finance that most of Rivian stock's price appreciation occurred within the last several weeks. "And as a result, we have been seeing short covering in the stock," he noted.
According to Reuters, some 831,000 Rivian options contracts traded on Monday, two times its average daily volume.
Daniel Kirsch, head of options at Piper Sandler, told the news agency that much of the options trading has consisted of investors buying "super short-dated calls." He added that the options activity had helped drive Rivian's shares higher.
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Sources: Yahoo Finance, Reuters