BBeach

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Are you talking about being part of the IPO or buying as soon as market opens for trade on the stock? I try not to sell off any IPO right away but I do set limit orders of 100-150% over the IPO price. 10-20% of the IPOs I buy end up hitting that number in the first 30 minutes of trading and come back down below the IPO price sometime in the next few days. I haven't always bought back in.
I am talking about buying after the IPO or on the IPO day. Typically if I get allocation on the IPO I will trade it and depending on where it is in valuation when it comes to market I will have upside targets that I will exit pretty quickly within the first month. then set limit orders below to take advantage of the dip that will most likely come. I did that with gopro. I got an allocation made 2X but in that case I never bought in again. I knew a hardware co wouldn't last too long at those valuations with competition on the horizon and the public was just sooo pumped about them. With Rivian's case I would be a buyer because I believe in the product long term.
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Ribeye

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Wouldn’t it be great if preorder holders who actually purchased could somehow be classified as an initial investor such that your $1000 deposit is converted into an equivalent/proportional amount of IPO shares. After all, the $80b+/- valuation has a lot to do with our unwavering commitment to the adventure.
 

boneil1

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Might be a good buy around a $20-$10 billion market cap. Definitely should be priced more as a car manufacturer and less of a tech company. It appears that these are going to be great trucks and I can't wait to get mine, but we're buying a truck, not a technology.

If you believe we should be priced as a tech company, I would like to hear why.
 

LoneStar

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Wouldn’t it be great if preorder holders who actually purchased could somehow be classified as an initial investor such that your $1000 deposit is converted into an equivalent/proportional amount of IPO shares. After all, the $80b+/- valuation has a lot to do with our unwavering commitment to the adventure.
That's a Goddamn Great Idea! :clap:
 

LoneStar

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As a complete stock-trading moron, how does the avg.-Joe get to participate in the IPO sale right out of the gate? At the initial price? Always seems like those shares are already pre-sold or pre-allocated or in some way roped-off from a general public buy.

Using a stock trading service/app like Etrade or Robinhood always kicks in with a long enough delay on the "opening" that price is already escalated and no chance to enjoy that starting line gain.
 

sevengroove

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Using a stock trading service/app like Etrade or Robinhood always kicks in with a long enough delay on the "opening" that price is already escalated and no chance to enjoy that starting line gain.
Robinhood recently started a pre-ipo feature where you might get the chance to purchase a handful of shares ahead of the IPO day. It is not a guarantee that Rivian will be offered, nor is it a guarantee that you will get any even if it is. Worth checking out though: https://robinhood.com/us/en/support/articles/ipo-access/
 

thrill

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As a complete stock-trading moron, how does the avg.-Joe get to participate in the IPO sale right out of the gate? At the initial price? Always seems like those shares are already pre-sold or pre-allocated or in some way roped-off from a general public buy.

Using a stock trading service/app like Etrade or Robinhood always kicks in with a long enough delay on the "opening" that price is already escalated and no chance to enjoy that starting line gain.
That's exactly how those shares are distributed, because the regulations around initial stock sales *fully* favors the wealthy. This is called "protecting the little guy". The only way the rank and file get shares from the get-go is if Rivian holds some back for their customers, and this is such a paperwork hassle that I can't see them going to the trouble.
 

PastyPilgrim

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If you believe we should be priced as a tech company, I would like to hear why.
As cars become more software-based/focused it makes sense that these companies be treated more like software/tech companies than traditional car manufacturers. It's a lot easier to protect and profit off of software secrets and innovations than hardware.
With anything you do with hardware and manufacturing, once you release it, it's trivial for your competitors to emulate or improve upon. EVs have some conventional features (e.g. body panels, wheels, etc.) but at their core, they're a battery and a motor. The secret sauce of an EV is in things like battery/range/charge management, motor management (e.g. for range, performance, stability, towing, different modes, etc.), software experience and features (e.g. UI, features like self-driving, sentinel, etc.), and so on.

Where once you had a manufacturer tune body panels for efficiency, now you'll have something novel with software like dynamically switching to 2WD, adjusting ride height, controlling cooling/heating of batteries, dynamically adjusting power to each motor/wheel, etc.

That kind of stuff is much harder to reverse-engineer and/or emulate for your competition. And that's just the foundational stuff. Something like self-driving takes decades of RnD so getting ahead there is incredibly valuable. If Tesla is 5-10 years ahead, launches the first truly autonomous vehicle, and are the only player in the field for 5-10 years, then they have a license to print money. The data is also incredibly valuable; like Toyota doesn't have internet-connected vehicles so they have no data on their vehicles. EVs like Tesla, Rivian, etc. are connected to the internet and feed tons and tons of data back home, which is like gold for RnD.

There's also lots of revenue opportunities for these high-tech manufacturers that are not available to the old manufacturers, like licensing their tech/software, owning charging networks and being able to get a cut of the charging of your competitors (imagine Ford-owned gas stations!), selling direct to consumers, etc.

All that said, I don't know if Rivian is overvalued, I don't know anything about finance, but there does seem to me to be a fundamental difference in the likes of Tesla/Rivian and the likes of Ford/etc.
 

Coast2Coast

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There are numerous general questions around Rivian's IPO and how Rivian's IPO should be valued. As a retired business professor with some knowledge of the auto industry, perhaps I can weigh in. I'll number the paragraphs below to make it easier to respond, if anyone cares to.

1. Rivian has enough funds on-hand to become the second largest EV maker in the U.S., with the resources and capacity to produce 400,000-500,000 vehicles by 2025. In other words, Rivian already has enough funds to be a major domestic EV player.

2. This begs the question of why Rivian is going IPO. Obviously, Rivian wants to be more than the second largest domestic EV maker. Why?

A. The automobile industry is global. Being big at home is no guarantee of success long-term.
B. There are first mover advantages to capture, and these are technical, financial & managerial.
C. Global expansion is hugely expensive and challenging. Multiply whatever it takes to be successful at home by significant factors, at least 5 times and more likely 10 times.
D. RJ has hinted at opportunities beyond EVs, including batteries, BMS, motors, other modes of transportation, electrical storage and who knows what else?

3. Rivian has sustainable competitive advantages, with an emphasis on sustainable.
A. Rivian will be ramping up to full production capacity during the next three years. Whatever is learned at Normal, and a lot will be, will be transferable to other production sites.
B. Rivian, like Tesla, is developing a lot of new technology in-house. That tech will have great value and it can be kept in-house or spun out and capitalized, as Rivian sees fit.
C. RJ has said the new U.S. factory, in Texas or wherever, will produce vehicles and batteries, and that battery technology and BMS will have great value as separate revenue streams.
D. Rivian has plans to expand production capacity in the U.S. and Europe, and RJ has also mentioned Asia & Africa. Rivian will likely produce a million vehicles by decade's end.
E. Rivian will likely have a stable of 8-12 vehicles by mid-decade: 3-4 vans; 2-3 pickups; 2-3 SUVs, and 1-2 sedans or sport cars. Rivian will fully reap economies of scope with so many vehicles.

4. Like most, but not all, IPOs, Rivian could experience share price dips in the weeks & months following its IPO. However, Rivian is not like most of the other IPOs against which it will be judged.
A. Rivian is an industry disrupter. Its IPO should not be judged against non-disrupter IPOs.
B. A new, global wave of energy and, especially, electricity production and distribution is coming. That's what RJ and Rivian are targeting in my opinion and, if succeesful, a $70-80 billion dollar evaluation at IPO will be seen as under-valuing Rivian's potential.
C. It's too soon to tell, but RJ and his team appear visionary and top notch but, at the same time, their feet are firmly grounded in the now and near term. The combination of a long-term, viable vision with immediate and significant abilities to execute in the here and now is rare.

Sorry, for the ramble. Rivian's recent news brought out long retired b-school instincts.
 

twysocki

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Could someone who understands the IPO process please explain why such a big deal is made over what the company (Rivian in this case) claims that it is worth? Is this what determines the opening price of shares in the IPO offering?
 

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If they stick to their $80B valuation, don't worry about getting in on the IPO. You'll surely be able to buy it soon afterward on the open market for less.

I love Rivan and everything they're doing, but $80B is awfully ambitious at this stage in their life cycle.
 

Chris S

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Could someone who understands the IPO process please explain why such a big deal is made over what the company (Rivian in this case) claims that it is worth? Is this what determines the opening price of shares in the IPO offering?
Yes, that's correct. Shares would be price at $80,000,000,00/# outstanding shares.
 

timesinks

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Yes, that's correct. Shares would be price at $80,000,000,00/# outstanding shares.
To add on to that, it's not really the "opening" price so much as the "closing" price immediately before exchange trading begins. It's the price the bankers and invited clients pay in the funding round to buy the shares that go on the stock exchange the next morning. IPOs are generally also priced to pop -- everyone wants the media coverage showing that first trading day close higher than the IPO closing price and the bankers and invited clients want to make a quick buck by being part of that process.
 

Autolycus

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To add on to that, it's not really the "opening" price so much as the "closing" price immediately before exchange trading begins. It's the price the bankers and invited clients pay in the funding round to buy the shares that go on the stock exchange the next morning. IPOs are generally also priced to pop -- everyone wants the media coverage showing that first trading day close higher than the IPO closing price and the bankers and invited clients want to make a quick buck by being part of that process.
The trick, of course, is that if the bank/brokerage that’s running the deal for the company prices the stock too low, the company may be justifiably pissed that they lost out on potential cash. You want enough of a pop for attention, but not so much of a pop that it’s obvious the company left cash on the table for other people to profit significantly.
 
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