Rivian Automotive (NASDAQ: RIVN) stock ran up 6.4% through 10 a.m. ET this morning before giving back most of its gains. As of 11 a.m. the stock's still up -- but only 1.9%. So why did Rivian pop and why did it then drop?
Well, the good news is that Rivian is partnering with renewable energy company Sol Systems and apparel company Patagonia to build a 50 MW "Lick Creek Solar project" in Stokes County, North Carolina, to supply clean energy in the area. The bad news is that Bloomberg news just dinged Rivian for "serious" safety violations at its Normal, Illinois, automotive plant.
What's up with Rivian today
The other bad news is that there's not much detail in the report about Rivian getting involved in solar power. It doesn't seem relevant to the company's core business of building electric trucks, and might even distract the company from its key concern -- controlling its $5 billion-a-year rate of cash burn.
At the same time, the bad news sounds kind of serious. As Bloomberg reports, Rivian racked up more serious safety complaints at its single factory in 2023 than did any other carmaker -- despite most of those carmakers operating multiple plants. Bloomberg cited amputations, broken bones, lacerations, a cracked skull, and vomiting of "Rivian blue" paint by at least one employee -- 16 complaints in total over the last 21 months.
Responding to the report, Rivian says the news agency "misrepresented" the data as some of the complaints were downgraded from the "serious" category by the Occupational Safety and Health Administration (OSHA). Additionally, OSHA itself agrees Rivian has since "improved their safety and health team and are very cooperative with the OSHA process." Still, it's negative PR that Rivian probably would have preferred not come out right at this moment, negating the positive news out of North Carolina.
Is Rivian stock a buy?
Meanwhile, the cash is still burning and Rivian recently cut its production forecast by 10,000 vehicles. With profitability just a distant prospect, it's hard to call Rivian stock a buy.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
