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Billionaire's Stock Sales Soar Despite 98% Drop in Value

An investment firm that manages the finances for Arrival SA's founder doubled its plans to sell the founder's shares this month, with a notification that it could sell as many as 40 million shares - about 10% of the founder's stake in the company. This news comes just days after the company warned that it may run out of cash.

November 22, 2022
5 minutes
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Denis Sverdlov is looking to boost stock sales at a time when the market is uncertain. He is hoping that by doing so, he will be able to increase the value of his company.

An investment firm that manages the finances for Arrival SA's founder doubled its plans to sell the founder's shares this month, with a notification that it could sell as many as 40 million shares - about 10% of the founder's stake in the company. This news comes just days after the company warned that it may run out of cash.

Sverdlov's net worth has declined rapidly in recent months, from $11 billion to just $195 million. The 44-year-old Russian businessman was a billionaire at the start of April, but his fortune has dwindled since then.

A representative for Arrival, a Luxembourg-based company, and Sverdlov’s investment firm, Kinetik, did not respond to requests for comment.

Kinetik announced in July that it planned to sell up to 20 million shares of Arrival through a prearranged trading plan. However, that plan was canceled this month, according to filings. Arrival's stock has slumped 95% this year due to production delays and mounting losses.

Arrival said that its cash holdings of $330 million would not be enough to sustain its operations for another year. The company also reported a quarterly loss of $310.3 million, which was up from $30.6 million in 2021.

Sverdlov, who is also Arrival's chief executive officer, founded the vehicle maker in 2015 with money from a previous fortune in telecoms. By 2020, he had invested about $450 million in his EV venture, which at one time forecast 2024 revenue of $14.1 billion.

He's now scaling back Arrival's workforce and looking to secure more funds as he uses the company's remaining cash to focus on the US, which is boosting support for electric vehicles. His other investments include Roborace, a competition for self-driving electric cars.

Sverdlov said recently that he has no misgivings about taking the company public, despite Arrival's stock slump.

"We don't regret going public, because we were able to raise $1.4 billion from the public markets," he told Bloomberg in September. "Raising that kind of money through the private markets would have been almost impossible at that time."

Kinetik has pledged Arrival stock to Citigroup Inc. in order to secure financing. The proceeds from this loan will be used to pay off other debts. Citigroup Inc. is also helping to oversee the firm's prearranged stock sales. These sales are scheduled to take place from November to March.

A representative from Citigroup declined to comment when asked about the situation.

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