Nasdaq is officially dropping Rivian in favor of an auto industry chipmaker

No more parking at the Nasdaq 100.

Nasdaq dumps Rivian for shrinking too much.

The electric car maker will lose its spot on the Nasdaq 100, which comprises 100 of the largest non-financial companies listed on the Nasdaq exchange, on June 20, Nasdaq confirmed yesterday (June 13).

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EV stock gets a boot for having had a weight of less than 0.1% for two consecutive months in the market-cap-weighted index, in which companies with rising share prices have a greater impact. The largest companies in the New York Index are Microsoft and Apple, each with a weighting of around 12%.

JPMorgan Chase analyst Min Moon, who warned two weeks ago that Rivian was on the verge of retirement, also correctly predicted its successor: ON Semiconductor (Onsemi).

Nasdaq will sell all Rivian stock and replace it with On Semiconductor stock. This could deal another blow to the struggling and money-hungry electric vehicle company.

On the map: Rivian's steep descent

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Interesting company: ON Semiconductors

The Nasdaq addition isn't the Scotsdale, Arizona-based company's first major milestone this year. In May 2022, On Semiconductor was recognized as a Fortune 500 company and ranked among the largest US companies by total revenue for the year. It was included in the S&P 500 the following month.

“Our inclusion in the prestigious Nasdaq 100 Index is a testament to the successful execution of our strategy over the past two years, during which our employees around the world have created tremendous value for Onsemi shareholders through their steadfast commitment and innovation have,” Hassane El-Khoury, President and CEO of Onsemi, said in a June 12 statement.

Rivian and AT Semiconductors, in numbers

20%: How much has Rivian stock fallen so far this year due to intense competition, supply chain difficulties and scaling challenges?

90%: How much has Rivian's stock price fallen since its record high in November 2021?

9,395: The vehicles Rivian built in three months ended March 31, 2023. The company needs to pick up the pace to meet its goal of producing 50,000 electric vehicles this year.

$14.3 billion: Rivian's market cap

$15.25: Rivian share price as of June 13th

$92.67: ON Semiconductor stock price

$40 billion: ON Semiconductor's valuation as of June 13 is up almost 46% compared to last year. According to the company, this figure has tripled compared to three years ago

$8.3 billion: ON Semiconductor's record-breaking 2022 revenue increased from $6.7 billion in 2021, regulatory filings show

2: Based in Scotsdale, Arizona, ON Semiconductor has enjoyed consecutive years of revenue growth.

$2 billion: ON Semiconductor is considering investing to increase production of silicon carbide chips, which are widely used to extend the range of electric vehicles, it said in May.

Quotable: Analysts are still bullish on Rivian

“That is our clear conclusion [Rivian] has survived the many challenges/firefights that made operations very challenging in 2022. With better stability, [Rivian] now has the breadth to properly address manufacturing process improvements or material cost reduction initiatives – there's lots of low-hanging fruit, lots of runways, and significant improvements being made. And with a clear line of sight [Rivian’s] Thanks to our new initiatives, we see more confidence on the way to breaking even in gross margin in 2024.”– Barclays analyst Dan Levy, who reiterated the outperform rating and $22 price target, wrote in a note earlier this month.

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