Rivian Raises Target IPO Price (RIVN)

[Temerarius]

Hmmmmmm....

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[RivianHockeyGuy]

Yeah, you are twisting my words because of blind brand loyalty, so I’m not going to belabor the point I literally just made. I’m also not going to take investment advice from a forum and will invest what I am comfortable with.

Good call, that frivolous lawsuit turned out to be a really good reason to avoid an IPO that is already up 59% in a mere two days after going public. But I'm sure you've found a justification for avoiding the risk, I agree that Rivian still looks "really bad" for firing her at "such an important moment".

 

[Canthoney]

Good call, that frivolous lawsuit turned out to be a really good reason to avoid an IPO that is already up 59% in a mere two days after going public. But I'm sure you've found a justification for avoiding the risk, I agree that Rivian still looks "really bad" for firing her at "such an important moment".

Yeah, not like the stock market ever goes down or people lose interest quickly, right? /s.

I have faith in Rivian long-term, never said I didn’t, but they need to get their production handled/established and also deal with the legal fallout from this executive, Tesla, and the dealership state lawsuits. I still invested at the IPO so I’m up along with everyone else who did, but I’m not confident if that gains will be sustained or continue to grow in the short-term until they can establish themselves.

 

[electruck]

So, who thinks RJ will meet the goal of $295/share by 2030?

 

[protamine]

So, who thinks RJ will meet the goal of $295/share by 2030?

If he doesnt then this site wont exist. I think by 2030 itll either be $500 or $5.

 

[Canthoney]

So, who thinks RJ will meet the goal of $295/share by 2030?

If the supply chain issues can be figured out next year I think it’s possible it could reach that price quite easily. I saw an interesting breakdown on what they could do with the $12 billion they raised:

$1 billion per new EV architecture, ie. R2,3,4…

$5 billion for a new factory

$300 million to expand their Rivian adventure network

I can’t remember what they would do with the rest, but it was a mixup fighting lawsuits, expanding their current factory, and having cash in reserve

 

[André]

I can’t remember what they would do with the rest, but it was a mixup fighting lawsuits, expanding their current factory, and having cash in reserve

They burn 1,5B$ in cash per quarter right now... with their short term expansion plan for Normal and the production ramp-up a large portion of the newly issued equity will go to operating losses. This is to be expected for a new company at this scale. 12B$ is 2 years worth of losses at the current run rate and the numbers will get worst during production ramp-up. They will be back in the market and start raising debts in 12 months maximum.

"We intend to use the net proceeds we receive from this offering for working capital to fund growth and other general corporate purposes, which may include research and development, sales and general administrative matters and capital expenditures. We may also use a portion of the net proceeds to acquire or make investments in businesses, products, offerings, and technologies, although we do not have agreements or commitments for any material acquisitions or investments at this time.

We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above. Accordingly, our management will have broad discretion in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business."

 

[stumptown85]

I would go so far as to say they are doing it wrong if they attempt to be profitable any time in the next few years. That cash needs to be deployed to develop the R2R and future products, get their software up to snuff with Tesla, expand in to Europe and SE Asia, expand charger infrastructure, and vertically integrate a lot of the components they buy today like batteries and the motors. Spend it and spend it well.

They burn 1,5B$ in cash per quarter right now... with their short term expansion plan for Normal and the production ramp-up a large portion of the newly issued equity will go to operating losses. This is to be expected for a new company at this scale.

"We intend to use the net proceeds we receive from this offering for working capital to fund growth and other general corporate purposes, which may include research and development, sales and general administrative matters and capital expenditures. We may also use a portion of the net proceeds to acquire or make investments in businesses, products, offerings, and technologies, although we do not have agreements or commitments for any material acquisitions or investments at this time.

We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above. Accordingly, our management will have broad discretion in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business."

 

[SANZC02]

They burn 1,5B$ in cash per quarter right now... with their short term expansion plan for Normal and the production ramp-up a large portion of the newly issued equity will go to operating losses. This is to be expected for a new company at this scale. 12B$ is 2 years worth of losses at the current run rate and the numbers will get worst during production ramp-up. They will be back in the market and start raising debts in 12 months maximum.

"We intend to use the net proceeds we receive from this offering for working capital to fund growth and other general corporate purposes, which may include research and development, sales and general administrative matters and capital expenditures. We may also use a portion of the net proceeds to acquire or make investments in businesses, products, offerings, and technologies, although we do not have agreements or commitments for any material acquisitions or investments at this time.

We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above. Accordingly, our management will have broad discretion in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business."

Don’t forget the potential income.

If they sell 53k units by the end of 2023 at an average of 76k per that is 4 billion.

I have no clue what the commercial van contract looks like but 100k at 50k per would be another 5 billion.

With the pending order reservations if they get everything ironed out and start to deliver at scale they are in great shape for a startup.

 

[Canthoney]

Don’t forget the potential income.

If they sell 53k units by the end of 2023 at an average of 76k per that is 4 billion.

I have no clue what the commercial van contract looks like but 100k at 50k per would be another 5 billion.

With the pending order reservations if they get everything ironed out and start to deliver at scale they are in great shape for a startup.

Do we know what the potential profit is on each unit? I thought I read somewhere they would be losing money on every unit they sold at least with the truck and SUV starting out. I’m sure they’re making money on the van though.

 

[electruck]

If he doesnt then this site wont exist. I think by 2030 itll either be $500 or $5.

I agree, I definitely think the long-term potential is there. I'm sure it will be a bit of a roller-coaster ride especially in these early days but I'll be hanging on to my DSP shares for the long haul and likely looking to invest more.

 

[kurtlikevonnegut]

Don’t forget the potential income.

If they sell 53k units by the end of 2023 at an average of 76k per that is 4 billion.

I have no clue what the commercial van contract looks like but 100k at 50k per would be another 5 billion.

With the pending order reservations if they get everything ironed out and start to deliver at scale they are in great shape for a startup.

I would expect them to sell a lot more than 53k by the end of 2023. I think 75-80k is more likely.

 

[electruck]

Do we know what the potential profit is on each unit? I thought I read somewhere they would be losing money on every unit they sold at least with the truck and SUV starting out. I’m sure they’re making money on the van though.

I suspect the prices will be rising before too long, but hopefully not so soon as to irritate us LE folks. The S-1 also indicated that they expect up to something like $15.5k in ancillary revenue per vehicle over a vehicle's life. I'm a little more skeptical of that though as I don't see myself ever forking over $10k for enhanced AD (but I may be in the minority in that I enjoy driving).

 

[SANZC02]

Do we know what the potential profit is on each unit? I thought I read somewhere they would be losing money on every unit they sold at least with the truck and SUV starting out. I’m sure they’re making money on the van though.

Not talking about profit, talking about money coming in that help offset the cash burn for a startup before they are actually generating income.

For example, if the burn rate is 1.5 billion per quarter and the sell 19.8k R1s per quarter that nets their burn rate to keep moving forward.

It took Tesla 10 years to have a profitable quarter, I do not think Rivian will take 10 years but would be surprised if it does it in under 7 years. There is simply too much planned growth to fund.

I was happy to see the IPO price rise before it was set. It gives them a much position to execute their plan. I would have been concerned if it came in at the low end of the initial estimate.

 

[kurtlikevonnegut]

Do we know what the potential profit is on each unit? I thought I read somewhere they would be losing money on every unit they sold at least with the truck and SUV starting out. I’m sure they’re making money on the van though.

As Rivian has said, "profit" is a long way off and honestly a lot of that is creative accounting anyways. The key is that they will be bringing in revenue to offset their losses, and revenue more than profit is what investors will care about for the next 3-5 years or longer.

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