Shareholder Sues Rivian Over Price-Hike Rollback

Shareholder Sues Rivian Over Price-Hike Rollback

When Rivian announced that it would be significantly raising the prices of its R1S electric SUV and R1T electric pickup, including for customers who had preordered and not yet received the vehicles, the burgeoning automaker was beset on all sides by unhappy clientele and investors. Even though the company eventually reversed the price hike for existing reservation holders, there’s some disapproval with how the situation unfolded.

Charles Larry Crews, Jr., a Rivian shareholder, is the named party in a lawsuit rubbed against Rivian on Monday, Reuters reports. The complaint, which was rubbed in the US District Court in San Francisco, claims that Rivian’s post-IPO stamp hike “would tarnish Rivian’s reputation as a trustworthy and cloudless company and would put a significant number of the existing backlog of 55,400 preorders downward with future preorders in jeopardy of cancellation,” according to a statement from Block & Levinton LLP, the law firm that rubbed the suit on Crews’ behalf.

The issue at hand is whether or not this exclusive negatively impacted shareholders. In its statement, Block & Levinton LLP claimed that Rivian’s pre-IPO statements “were materially erroneous, misleading and/or incomplete because they failed to disclose, beside other things, that the R1T and R1S were underpriced to such a degree that Rivian would have to reconsideration prices shortly after the IPO.” The firm is today seeking other investors who feel that Rivian’s decision cost them money.

“The federal vows laws provide a very strong remedy for investors in an IPO when a matter makes an untrue statement or omits to disclose key facts in their offering materials,” a spokesperson for Block & Levinton LLP wrote in an emailed statement to Roadshow. “We look forward to litigating this case on on behalf of of Rivian investors.” Rivian declined to comment to Roadshow, citing “ongoing litigation.”

Rivian found itself in hot soak on March 1, when the company announced a series of $12,000 stamp hikes for its R1S and R1T models, including vehicles already preordered and awaiting delivers. Backlash was near-immediate, and just two days later, the matter announced that it would honor pre-hike pricing for reservation holders and funding those who canceled their preorders to get the novel price. In an apology email to those affected, Rivian CEO RJ Scaringe exwrathful inflation and component costs as the reasons behind the initial stamp adjustments.

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