Investors are facing a change in market mood that many have never seen before. For years, the mentality on Wall Street has been that when stock prices are falling, it’s a good time to buy. However, this approach did not yield the rapid results it did for most of the 2010s, leaving many market players unsure of what to do next. This helped contribute to the continued losses of major market benchmarks that continued Monday morning. As of 7:30 a.m., futures contracts on the Dow Jones Industrial Average (^ DJI 0.00%) were down 541 points to 32,268. S&P500 (^GSPC -0.57%) futures fell 82 points to 4,038, while Nasdaq Compound (^IXIC 0.00%) futures fell 312 points to 12,384.
A few individual stocks stood out with even bigger declines than the broader market. The fall in the shares of the EV specialist Rivian Automotive (RIVN -6.25%) had little to do with the company’s fundamental performance, but they still hit shareholders hard. Meanwhile, Palantir Technologies (PLT -6.32%) released its latest financial results, and its investors didn’t find everything they wanted to see in the report. You’ll learn more about both companies below.
Selling pressure on Rivian?
Shares of Rivian Automotive were down nearly 16% in premarket trading on Monday. The news came as ordinary investors wondered what those who had entered the ground floor to invest in the electric truck specialist might do with their shares.
Rivian made its initial public offering (IPO) in November 2021, and among its early investors were Amazon and Ford Motor Company, both of whom have taken double-digit stakes in the company. As often happens with IPOs, these early investors and others were subject to lock-up provisions that prevented them from immediately selling shares once Rivian went public.
However, that six-month lock-up period expired over the weekend and reports surfaced that Ford immediately sought to sell approximately 8 million shares of the more than 100 million Rivian shares it possesses. With such large blocks of shares, it’s common for investment bankers to require sellers to accept a discount, and that’s apparently the case here. It’s also possible that Ford isn’t the only big seller in the stock, especially given the downward pressure on the stock.
Rivian’s rise and fall has been painful for shareholders and has impacted the financial results Ford and Amazon have released since the IPO. If today’s large investors are truly selling off some of their holdings at current levels, it calls into question their belief in Rivian’s ability to stand out from its competitors.
Palantir faces disappointment
Meanwhile, shares of Palantir Technologies were down 13% in premarket trading Monday morning. The data analytics company released its latest financial results before the market opened, and investors weren’t happy with what they saw.
Palantir’s first quarter results again showed considerable growth. Overall revenue rose 31% year-over-year to $446 million, as sales on the commercial side of its business soared 54% from year-ago levels. Government-related revenue was only up 16% from 12 months ago, but Palantir saw a strong influx of customers, with customer numbers up 86%.
From a results standpoint, however, Palantir remained on the lower end. The company lost $101 million for the quarter, or $0.05 per share, and even after taking into account extraordinary items, adjusted earnings were just $0.02 per share.
Palantir’s stock was caught in the downdraft of high-growth tech stocks in general, and today’s move only added to the negative sentiment towards the stock. Despite the potential for future growth, investors are focusing more on short-term factors to drive Palantir stock prices down again.