It’s been a difficult six months for Rivian Automotive (NASDAQ:RIVN), but things may be finally starting to shift. The electric vehicle (EV) producer is on the verge of an important acquisition. According to Electrek, Rivian is in talks to purchase A Better Route Planner (ABRP), the world’s most popular route planner for EV drivers. RIVN stock is reacting well to the news, although the financial details of the deal have yet to be disclosed.
This positive catalyst comes at a good time. While RIVN has performed well this month, the company has received some bad news that threatens its growth prospects. With a new deal on the horizon, though, Rivian is reminding investors that it shouldn’t be counted out yet. Plenty of experts have soured on its growth prospects recently, including InvestorPlace‘s Louis Navellier. However, this news could signal the start of the turnaround that Rivian investors want to see.
What’s Happening With RIVN Stock
After an excellent week, RIVN stock is poised to close it out on a dour note. As of this writing, it is down about 1% for the day. It is also worth noting that despite some volatility, like we’re seeing today, Rivian has enjoyed an excellent month. RIVN stock has risen more than 15% this month. For a company that has received so much bad press lately, this electric truck innovator is still performing fairly well overall.
This week’s steady growth is especially impressive as Rivian is bracing for a negative catalyst. On June 20, it will be removed from the Nasdaq-100 Index after spending two consecutive months with a weight of less than 0.1%. Some experts have speculated that this will prompt investors to turn their backs on the company. However, even as this dark day looms ahead, Rivian is still powering up and showing investors it has no intention of going down without a fight.
Despite today’s sputtering, RIVN stock can still rebound as momentum builds for its new deal. Sweden-based firm Iternio owns ABRB. While the company is small, it comes with both a consumer-facing component and a back-end entity that supplies routing data. It describes ABRP as “the world’s largest public service for EV Planning.” If that is true, it could certainly drive growth for Rivian by helping the automaker provide better routing services for its drivers.
The Road Ahead
The implementation of ABRP’s tech could easily be a selling point for prospective EV drivers, especially as Rivian ramps up its SUV production. As Electrek reports:
“The acquisition makes sense. Rivian could roll their own ABRP for their app and on-screen route guidance and probably was in the process of doing so. But as it builds out its adventure network of charging stations and plans to double vehicle fleet yearly, it probably made sense to go buy a much more mature product made by a small number of employees.”
It’s true that Rivian still has some hurdles to clear before it can regain the ground it lost in 2022. However, the acquisition of ABRP is an excellent start. Investors should take it as a sign that Rivian is working hard to turn around and regain its spot at the front of the EV race.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
