What happened
It's a bearish start to the shortened trading week, with the S&P 500 dipping 1.4%, but pessimism pertaining to Rivian (RIVN -2.53%) has electrified investors today. With two insiders selling shares, Main Street investors are likely speculating that the EV stock is going to shift gears and reverse course from its recent rise.
As of 11:02 a.m. ET, shares of Rivian are down 5.1%.
So what
On Friday, regulatory filings revealed that Jeff Baker and Claire McDonough had trimmed their positions. Baker, Rivian's chief accounting officer, sold 2,331 shares last week in a transaction valued at $44,253. In two separate transactions, McDonough sold a combined 4,992 shares, netting the company's CFO $99,997.
Following the selling spree, Baker and McDonough have 87,000 and 72,902 shares, respectively.
While insiders choosing to buy shares can be recognized as a clear sign that they expect shares to rise, selling activity isn't as clear a signal. The individuals may simply be looking to free up cash -- among other reasons -- leading them to reduce their positions.
In this case, however, there's more cause for concern. It's the decision of two insiders, not one, suggesting that maybe they know something material to the company's financial well-being. Additionally, there hasn't been any recent insider buying activity that would instill confidence in investors' minds.
Now what
While it's not the start to the shortened trading week that Rivian investors were looking for, there's no reason to panic. The two insider transactions are certainly something to take note of, but more substantive company news is coming next week when the company reports fourth-quarter 2022 earnings -- an event that surely most of the EV world will be watching.
