Rivian Stock Plunges 10% After Company Misses Delivery Expectations
Rivian Stock Plunges 10% After Company Misses Delivery Expectations
By:Mike Butler
Expect more implied and realized volatility in Rivian stock as the company grows and attempts to enter positive earnings-per-share territory
- Rivian delivered 13,972 vehicles from October to December in 2023, down over 10% from the previous quarter.
- Stock in Rivian opened 2024 down over $2.50 from the 2023 close of $23.46.
- Rivian is set to report quarterly earnings in late February or early March.
Rivian misses on electric vehicle deliveries
Rivian (RIVN) recently announced that although EV production has increased, it delivered 13,972 vehicles last quarter which was down 10% from the previous quarter. Although this was just slightly below expectations, RIVN stock dropped over 10% as well on the news, starting 2024 on the wrong foot.
A Rivian competitor, Tesla (TSLA), reported an increase in deliveries relative to expectation in the same timeframe, which could be why the market is reacting so negatively on the first trading day of 2024.
Rivian stock price expectations
Looking at the options market can tell us all we need to know about the future stock price expectation for Rivian, at least on a one standard deviation range based on current implied volatility.
On the tastytrade trading platform, we can see the +- expected stock price move based on the number of days remaining in an option contract's cycle.
The first thing that stands out to me is the increase in implied volatility when moving from February to March. This tells us the quarterly earnings report is certainly after Feb. 16, 2024, but definitely before March 15, 2024. The March 2024 expiration cycle has a +-$4.23 expected move from the current stock price, which is just over 20%. As we get closer to February, more options expiration cycles will open up and we will get more clarity on the actual earnings date.
Looking to the end of the year, we can see that through Jan. 17, 2025, RIVN stock is expected to have a +-$10.20. This is a massive expected move for just over a year, considering we're talking about a $20 stock price. That implies the stock will have a total bullish and bearish implied range equivalent to the stock price itself.
Expect much more implied and realized volatility in Rivian as the company continues to grow and attempts to enter positive earnings-per-share territory.
Join us on Options Trading Concepts Live every market day at 11 a.m. CDT as earnings approach for Rivian and we strategize around the announcement.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
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