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Rivian Stock Really Costs 19 Cents. Investors Shouldn’t Forget Cash.

Nix

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I like the fact that Rivian has cash - it means they can fund most of R2 manufacturing without having to go back to the markets too much (hopefully). If they can make that step, R2 should get them being profitable most quarters, similar to how the Model 3 program did for Tesla (but remember how many cash raises Tesla made to get the 3 finally rolling?)

Lucid (and other EV startups) on the other hand may need to keep going to the market, diluting existing shareholders.

I'm invested in both, but wish I had more $ to double-down on RIVN (though the way markets are behaving this week, I'd probably wait until next week to see what shakes out first).

Yes, the value in Rivian having cash is that it is a means to an ends of eventually becoming a successful profitable manufacturer of many R1 and R2 variants. It is a good thing they have that cash to hopefully achieve that end goal.

The cash itself is not the value. The value is the potential of what they can create with the cash -- that is the value. The potential is what to invest in, not the cash itself. The cash itself is going to go away. The investment is in what Rivian will have once the cash has been spent.
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KootenayEV

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Yes, the value in Rivian having cash is that it is a means to an ends of eventually becoming a successful profitable manufacturer of many R1 and R2 variants. It is a good thing they have that cash to hopefully achieve that end goal.

The cash itself is not the value. The value is the potential of what they can create with the cash -- that is the value. The potential is what to invest in, not the cash itself. The cash itself is going to go away. The investment is in what Rivian will have once the cash has been spent.
The cash has value in the sense you mention (ie future growth); however it also means they should not need to dilute existing shareholders as much as say Tesla did while getting to the 3 (or Lucid likely will need to) and profitability. IE I think (barring broader macro factors that might tank everything for a bit) that they are near the floor. But take my opinions with as many grains of salt as needed - I still work a day job ha, so I'm obviously no stock guru. :)
 

LL75

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As others note, I just don't see why this "negotiation" is even a negotiation, let alone a public news story. Why isn't it just a one-liner document saying "suspended" on that exclusivity clause.

Who agreed to a one-sided exclusivity that doesn't compel the buyer to take a planned production rate? Who built up the EDV capacity beyond the plan? Why is the R1 still slow? Hopefully Rivian is not still crying "chip shortage."

With $RIVN "flat lining" on its all time low under $13, there's not much to be said or done.
Exactly my point. This negotiation should not be a public thing for the media to spin. RJ and his team should have know this. Rivn is on thin ice as it is.
 

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I have 980 shares at $21 dca. Not going to buy anymore until I get my r1s.
I'm in the same boat but my avg is $23ish. I may buy more to avg down when this thing hits $9 😒
 

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How refreshing to not get a 9:30am email this morning from MS "Rivian New 52 Week Low Alert" :)
 

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tosehee

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Your list of missteps seems a lot less impressive than your passion for repeating them.

What I see from my couch is a guy who started a car company out of nowhere and designed/built a fantastic product that's drawing acclaim from all over the interwebs, who unfortunately ran into a pandemic and the subsequent supply train restraints, and is now dealing with collapsing world finance, being asked to step aside by some random Monday-morning quarterback with internet access.

Your shorts are showing.
I have to agree. I own both R1T truck and stocks.. and while my avg is way higher than the current price, I do agree that RJ is a guy who will make this right as time progresses.

None of these issues are his fault, and as things turn around, the value of the stock and company will go up as well.

I am buying more.
 

jjswan33

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How refreshing to not get a 9:30am email this morning from MS "Rivian New 52 Week Low Alert" :)
I mean it's great that the stock is up today but the market is proving this articles point.....

Rivian R1T R1S Rivian Stock Really Costs 19 Cents. Investors Shouldn’t Forget Cash. 1678993717330
 

Dark-Fx

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Who agreed to a one-sided exclusivity that doesn't compel the buyer to take a planned production rate? Who built up the EDV capacity beyond the plan? Why is the R1 still slow? Hopefully Rivian is not still crying "chip shortage."
Rivian, a company that had not yet sold a single vehicle, that was in need of additional funding to work towards that goal. I definitely have to hand it to Rivian for the timing on their IPO with where the market was. Amazon was supposed to be in a situation where the EDV excess capacity started happening at year 5 but things have changed since then, as we can all attest to.
 
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Bought some more at $13 bringing average down to $17.01.

I disagree with the statement that cash isn’t part of EV. The professional valuations that I’ve seen calculate NPV from projected cash flows discounted by weighted average cost of capital. They then subtract debt and add back in cash and marketable securities.
 

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DuoRivians

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Bought some more at $13 bringing average down to $17.01.

I disagree with the statement that cash isn’t part of EV. The professional valuations that I’ve seen calculate NPV from projected cash flows discounted by weighted average cost of capital. They then subtract debt and add back in cash and marketable securities.
EV = Equity Market Cap + Debt - Cash

Look it up
 

Tahoe Man

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How refreshing to not get a 9:30am email this morning from MS "Rivian New 52 Week Low Alert" :)
Agree. It is now down 90% from the highs, incredible but the RIVN endless slide begins continues.

I'm not sure if averaging down is a good method, the problem is you can easily average into the abyss. Someone dollar cost averaging from the high and investing monthly is down 65%. The other issue is you can end up too heavily weighted in the issue.
 

evguy

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Agree. It is now down 90% from the highs, incredible but the RIVN endless slide begins continues.

I'm not sure if averaging down is a good method, the problem is you can easily average into the abyss. Someone dollar cost averaging from the high and investing monthly is down 65%. The other issue is you can end up too heavily weighted in the issue.
When the stock is volatile (as it has been for at least the past couple of weeks), it's easier to average down without increasing the size of your position, and you can begin chipping away at losses to date in the process. On a given day, you can buy 100 shares at one price and sell 100 shares at a higher price. Using this method, my net position (# of shares) has remained constant, but I've lowered my average cost to just under $14 (down from over $17). And if you're trading in a IRA account, you don't have to worry about capital gains taxes on the daily trades. Hopefully $13 is the new floor, but we'll see... (I'm no expert by any means.)
 

jjswan33

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When the stock is volatile (as it has been for at least the past couple of weeks), it's easier to average down without increasing the size of your position, and you can begin chipping away at losses to date in the process. On a given day, you can buy 100 shares at one price and sell 100 shares at a higher price. Using this method, my net position (# of shares) has remained constant, but I've lowered my average cost to just under $14 (down from over $17). And if you're trading in a IRA account, you don't have to worry about capital gains taxes on the daily trades. Hopefully $13 is the new floor, but we'll see... (I'm no expert by any means.)
That is what they call a wash sale, no tax benefit. You can't sell a security at a loss and then buy a substantially similar security within 30 days.
 

evguy

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That is what they call a wash sale, no tax benefit. You can't sell a security at a loss and then buy a substantially similar security within 30 days.
I'm trading in a IRA, I won't be claiming a capital gains loss, nor am I looking for one. Just averaging down without sinking more $$ into the stock.
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