The stock of Ford Motor Company (F) declined in the current market. The stock values at around $21.76, losing more than 3% from the previously closed value. At the end of the last trading session, the stock closed at $22.45. The stock volume traded in the previous trading session was approximately 110 million shares.
Reason for the Ford Motor decline
On Jan 18, 2022, Ford announced that its investment in Rivian saw an $8.2 billion increase in the Q4 after Rivian’s IPO. Ford will also consider its $900 million non-cash earning due to investment in Rivian as a special item. It was announced earlier by Ford following the Rivian’s IPO in October. Ford’s full-year adjusted EBIT and adjusted EPS will not include the first-quarter gain. Ford earlier forecasted between $10.5-11.5 billion in adjusted EBIT for fiscal 2021 when it reported Q3 results on Oct 27.
Global pension and post-retirement employee benefits revaluation resulted in non-cash, pre-tax accounting gain of $3.5 billion in Q4 and $3.9 billion for fiscal 2021. Ford repurchased and redeemed over $7.6 billion in high-cost debt in Q4, saving the company $1.7 billion. The transactions aimed to strengthen the company’s balance sheet and reduce ongoing interest costs. A non-cash benefit of $3.6 billion is included in the books due to Ford’s global tax structure changes and their impact on deferred tax.
Effect on the stock
The news of the gain on the investment by Ford in Rivian made the investors invest heavily in Ford’s stock. Due to which the stock went high sometimes, it started to decline because of the increased trading volume. The company said that its stock value might increase due to the investment in Rivian. Ford’s stock was high in demand after the potential of growth forecast.
Conclusion
The stock of Ford could see significant growth in the future after its gain on the investment in Rivian. Ford’s stock is among the potential candidates for investors to include in their investment portfolio for future capital gain.
