Rivian agrees to pay $250 million to settle IPO fraud lawsuit
Rivian will pay $250 million to settle a lawsuit alleging they defrauded investors by concealing underpricing of EVs before and after their IPO.Summary
Rivian Automotive Inc. has agreed to a $250 million settlement in a 2022 class-action lawsuit brought by shareholders who claimed the electric vehicle maker misled investors regarding vehicle pricing during its initial public offering. The lawsuit alleged Rivian concealed that its EVs were underpriced, leading to significant price increases in March 2022 – the R1S price rose to $84,500 from $70,000 and the R1T to $79,500 from $67,500 – which angered customers. Rivian denies wrongdoing but states the settlement allows them to focus on the upcoming launch of the more affordable R2 SUV. The success of the R2 is considered vital for Rivian’s future, as the company also faces cost-cutting measures, including a 4.5% workforce reduction (over 600 employees), amid declining EV demand and import tariffs.
(Source：Reuters)