Price Increase Impact vs. Market Cap Decrease Impact: Day 1

[evergreenmachine]

Well, for what appears to be in the range of $1.0~$1.5B price increase to their backlog (round math of course not knowing exactly what the consumer vehicle backlog is comprised of), Rivian just took $5.4 Billion out of their market cap with the overall market reaction to their pricing updates (this when the broader NASDAQ was up 1.6%).

On a net/net basis, that seems like a really poor decision by management!!!

Aside from a ton of pissed-off customers (maybe many less now on 3/2), they I am sure have a ton of pissed-off investors....including myself!

The double whammy STINGS!!!

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[Taycanfrank]

It's a bizarre decision. They could have eaten, what, 50 million on honoring early pre-orders and avoided most of this mess.

Sure, a lot of people would have been upset but they could have kept their biggest fans happy .

They also could have eased in the full increase. Ie.. 2018/2019 orders see no increase, 2020-2021 see 50%, all new orders see 100%.

Would have been much more palatable and wouldn't have cost them that much in the long run if they really are in it for the long run.

Yes, 50 million sounds like a lot but given their IPO and stated goals it would have been barely a splash.

 

[kurtlikevonnegut]

If market cap were permanent that would be a terrible business decision.

Market cap is fluid though, so they could gain that back and improve market cap beyond what it was yesterday before the week is out. Would that all of a sudden make this a brilliant decision?

 

[fotoflux]

yeah, someone is going to lose their job for this. Or maybe have a planned "retirement."

Completely avoidable drop in the stock prices and loss of brand trust

 

[Max]

yeah, someone is going to lose their job for this. Or maybe have a planned "retirement."

Completely avoidable drop in the stock prices and loss of brand trust

There is no way Rivian didn't see any of this coming. I have no doubt someone is making a lotta dough from the planned shock. I don't know what the next step is but that is planned too.

 

[COdogman]

It's a bizarre decision. They could have eaten, what, 50 million on honoring early pre-orders and avoided most of this mess.

Sure, a lot of people would have been upset but they could have kept their biggest fans happy .

They also could have eased in the full increase. Ie.. 2018/2019 orders see no increase, 2020-2021 see 50%, all new orders see 100%.

Would have been much more palatable and wouldn't have cost them that much in the long run if they really are in it for the long run.

Yes, 50 million sounds like a lot but given their IPO and stated goals it would have been barely a splash.

I agree 100%. And I would have been in that 50% increase because I waited to put down my $. Fair is fair. They are basically having to start over with their branding because they burned all of the people who backed them up to yesterday. It really makes no sense.

 

[kanundrum]

There is no way Rivian didn't see any of this coming.

To forsight, one must view the value of the people, to do so, one must have the ability to communicate.

Rivian: Please pay us 25% more for a vehicle you will take delivery for in 1 month how ever we cannot show you pictures of the trunk open NOR any features of the interior.

 

[Craigins]

To forsight, one must view the value of the people, to do so, one must have the ability to communicate.

It is actually stated in the S-1.

 

[kanundrum]

It is actually stated in the S-1.

100%

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