Ford "PRICE WAR" drives RIVN under $10

[Rivian Head]

Tesla's stock is still incredibly overpriced. You people are crazy for saying other stocks need to trade off fundamentals but totally willing to ignore the same for Tesla.

Tesla's stock is still incredibly overpriced. You people are crazy for saying other stocks need to trade off fundamentals but totally willing to ignore the same for Tesla.

Tesla’s PE has come down to 37 same as microsoft. For perspective, NVDIA 72. QQQ 35.

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[Dark-Fx]

Tesla’s PE has come down to 37 same as microsoft. For perspective, NVDIA 72. QQQ 35.

"Look at these other overpriced stocks for comparison" Lets see what Tesla's PE is after Q1 earnings are reported.

 

[thair]

Rivian should avoid raising capital through dilutive means right now while the stock is basically at cash value. Management does need to control costs to ensure they can get through the launch of R2. I still think they deep in the process of doing that with the re-tooling and re-negotiation of their supply chain.

They don't have enough money to get through the launch of R2 at any sort of scale that will matter. That is the problem. They are cutting costs but they will also have to cut prices. The market doesn't lie.

 

[Rivian Head]

"Look at these other overpriced stocks for comparison" Lets see what Tesla's PE is after Q1 earnings are reported.

I guess you have missed on all of them ??

 

[Dark-Fx]

They don't have enough money to get through the launch of R2 at any sort of scale that will matter. That is the problem. They are cutting costs but they will also have to cut prices. The market doesn't lie.

I don't think that this is true. The market is full of liars.

 

[RivianSurvive]

Tesla’s PE has come down to 37 same as microsoft. For perspective, NVDIA 72. QQQ 35.

This is newbie mistake by comparing P/E ratio without context. Nvidia is growing top line at over 200% with a significant growing segment of Gen AI. Tesla‘s most recent quarter was double digit decline with net profit falling even more.

 

[evguy]

Yes raise capital NOW. They should have done a secondary in the fall when they saw sales collapsing and the stock price was in the mid $20s. They should have done it in the first quarter because nothing was changing. The same is true today. You raise capital when you can and right now while the stock is beaten they still have equity value that they can sell. Otherwise they will run out of money and be out of time and options.

They DID raise capital last fall - $1.5 B in convertible notes in October. That was after an issuance of $1.3 B in March of last year. My guess is they won't raise capital again until after achieving gross profit in Q4 this year, as conditions will probably be more favorable for a raise after that milestone.

 

[thair]

They needed a lot more than $1.5 billion and still do. I'm sure they were hoping to do it in pieces which was clearly the wrong strategy with the bottom falling out of their business. Is it better to raise capital with your common at $25? Or at $8......or how about $4?

 

[evguy]

They needed a lot more than $1.5 billion and still do. I'm sure they were hoping to do it in pieces which was clearly the wrong strategy with the bottom falling out of their business. Is it better to raise capital with your common at $25? Or at $8......or how about $4?

But why do you think they need to raise more capital right now? They have about 9B in cash and equivalents on hand, which gets them through the end of 2025 at minimum. Seems likely that conditions for the next raise will be better in 2025, after they've executed a few steps on their path to profitability (Q2/Q3 2024 structural cost reduction, gross profit in Q4 2024, starting volume sales to new RCV customers in 1H 2025).

 

[thair]

Because their R1 business is deteriorating rapidly. I believe their guidance for sales this year is wildly optimistic at current prices.

They hinted at this by saying their projections imply a pick-up in demand throughout the year. I don't believe there are any Rivian, EV specific, or macro reasons to assume this.

 

[LetsgoRIVN]

Because their R1 business is deteriorating rapidly. I believe their guidance for sales this year is wildly optimistic at current prices.

They hinted at this by saying their projections imply a pick-up in demand throughout the year. I don't believe there are any Rivian, EV specific, or macro reasons to assume this.

Where did they hint that ? All I heard was the market is bad and this is conservative.

 

[thair]

Where did they hint that ? All I heard was the market is bad and this is conservative.

It's in the 2024 outlook of the shareholder letter.

"Our full year targets rely on an improvement in order rate driven by our planned go-to-market strategies."

 

[evguy]

Because their R1 business is deteriorating rapidly. I believe their guidance for sales this year is wildly optimistic at current prices.

They hinted at this by saying their projections imply a pick-up in demand throughout the year. I don't believe there are any Rivian, EV specific, or macro reasons to assume this.

There is reason to worry about demand this year, but I'll note that they exceeded their own delivery forecast for Q1. I hope that the post-shutdown R1 line includes a base R1S trim priced under 70k. They need to expand their addressable market asap, ideally without lowering average selling price, but that will be a challenge.

 

[zipzag]

There has never been so much writing on the wall. I have no idea what RIVN is doing, delaying the next capital raise. Things are not going to get better. It needs to raise capital now - that is, unless RIVN is already in takeover talks to be acquired by another automaker (this is the only reasonable explanation as to why capital has not been raised yet). A capital raise now probably knocks the stock down to $4 per share. Maybe an acquisition could get done at $5 per share.

They will likely do convertible senior notes once SP gets low enough that the buyers will value the potential upside on the equity.

 

[bdwalters]

No one is going to subscribe to FSD at $99 who hasn’t already

The price drop will bring in some more revenue, but I don’t think it will be enough to help the stock all that much in the short term. Tesla is going to drop another 20-30% soon. It will probably drag Rivian down with it. Fisker going bankrupt won’t help either. Anybody who wants to average down will be able to buy at $5 soon.

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