RIVIAN STOCK

[ironpig]

You know, it's interesting. If Rivian thought they had to make such a large price increase to be profitable, and now isn't making that increase, do you feel better or worse today as a stock holder?

They've now committed to making all pre-orders at a price they decided isn't enough.

This is a very very good point. and it will be interesting to see if someone asks this at the shareholders meeting.

As a shareholder, I think I would have rather they made a pricing adjustment that insures they aren't making consumer trucks at a loss for the next 4 years.

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[Keith_Been_Waiting]

They really missed out on applying a more moderate or stagged increase to preorder holders, increasing profitability while limiting brand damage. Doing 2021 pre-orders at the configuration price is really rough.

Very valid and lucid point. They showed their hand and have created a weird sentiment. Although there is a big relief from most of the pre-order people on this, but the investor will look at it with puzzling sentiment.

But eventually, if you look at this historically, the goodwill in the long run trumps this little glitch. People will remember this more.

 

[White Shadow]

Very valid and lucid point. They showed their hand and have created a weird sentiment. Although there is a big relief from most of the pre-order people on this, but the investor will look at it with puzzling sentiment.

But eventually, if you look at this historically, the goodwill in the long run trumps this little glitch. People will remember this more.

Keep in mind what happened to the stock price just yesterday. Due to the news of a price increase, the stock tumbled about 13%. Today, the price increase is still there, but not for people who pre-ordered. So this results in a win-win situation. Pre-order people will be happy again and investors will still realize that pricing for all future orders will be increased. Rivian honoring pre-order pricing is just a minor detail, although it's quite a lot of orders for a company who hasn't delivered many vehicles at all yet.

 

[Keith_Been_Waiting]

Pre-order people will be happy again and investors will still realize that pricing for all future orders will be increased. Rivian honoring pre-order pricing is just a minor detail.....

You are absolutely right. Hmmm .... let's see where this all lands.

Interesting article on their cash reserves:
https://seekingalpha.com/article/4492514-rivian-stock-strong-buy-before-q4-earnings

And sentiment of the news:
https://electrek.co/2022/03/03/afte...cks-on-price-hike-letter-from-founder-ceo-rj/

 

[Gshenderson]

I still expect disappointing news and lowering future guidance on the production ramp on 3/10. That will likely push the stock lower. I think that will (or at least should) drive the stock price more than the drama of the past 48 hours. I think some C-suite shakeups would help the stock as well by letting the market know that they are serious about addressing these kinds of colossal f-ups going forward.

 

[moosehead]

IMO, like many successful companies, Rivian's most valuable asset was/is its brand goodwill, which manifest in preorder deposits in a start up. Rivian's goodwill value shows up in their rather heady enterprise value even at the 52-week low which is still a massive multiple on proforma revenues.

Next week's earnings call is pressure packed, but that is the benefit of public company scrutiny and hopefully RIVN can respond. I'm glad this is not held in a SPAC as comparison.

 

[Forager]

What's the sentiment here?
Do you think given this (and this being a really very nice letter and clear apology, admittance and reversal), the stock will rebound?
Already seeing the sell orders from last night completing but a lot more buy orders balancing that and pushing it up.

Don’t expect any rebound for a while. Now investors are spooked because Rivian has broadcasted that they are going to eat a ~$1 billion loss on their first 50-70,000 deliveries. In addition, the flip-flop makes Rivian management seem like a wild card and the initial price increase communication makes them a liability.

For the stock, there is no good angle on this.

edit: typo

 

[therealhoff]

Billion dollar revenue writeoff for customer goodwill I think should be characterized as more than a "little glitch". I applaud the decision, but I worry about the financial impacts and long term viability. I would have accepted a more informational message about supply chain costs, 50% of the price increase for preorder holders, and $1000 toward free accessories or something. Pre-order holders needed to still see they were getting a deal, even if it wasn't the original deal.

 

[Keith_Been_Waiting]

More from the ticker:

https://www.wsj.com/articles/electr...-increase-apologizes-to-customers-11646321716

 

[lostpacket]

Well I bought back in to my tiny position and even picked up a few shares because I believe in the company again.

It surely will be volatile for awhile but now I have bought in at $50 instead of $60, seems like a good deal to me.

And if it hits $40 after earnings or even lower, that's where I will buy even more. They now have 50-70k of re-energized fans, and I think that will help.

Edit: Also I like the leadership qualities displayed by RJ in fixing it and owning the mistake. This is the kind of characteristic that will make people even more inclined to follow him and work for him and do their best work for the company.

 

[Keith_Been_Waiting]

Also I like the leadership qualities displayed by RJ in fixing it and owning the mistake. This is the kind of characteristic that will make people even more inclined to follow him and work for him and do their best work for the company.

Yes that was very well received !! I know it made me feel better.
But having said that, don't you think he would have known all of this?
Could it be that yesterdays comms were not finalized and got sent out?

 

[JerseyGreens]

Well I bought back in to my tiny position and even picked up a few shares because I believe in the company again.

It surely will be volatile for awhile but now I have bought in at $50 instead of $60, seems like a good deal to me.

And if it hits $40 after earnings or even lower, that's where I will buy even more. They now have 50-70k of re-energized fans, and I think that will help.

Edit: Also I like the leadership qualities displayed by RJ in fixing it and owning the mistake. This is the kind of characteristic that will make people even more inclined to follow him and work for him and do their best work for the company.

This is the right play. Its going to be a roller coaster leading up to 3/10 and beyond.

Buy "some" in the dip today but not a TON at once - never ends well.

 

[LoneStar]

It's still dropping at this point.. I put in a limit buy of 300 shares at $50.. I'm really hoping it hits.

so damn close!

 

[lostpacket]

Yes that was very well received !! I know it made me feel better.
But having said that, don't you think he would have known all of this?
Could it be that yesterdays comms were not finalized and got sent out?

I doubt they sent those coms without careful planning. But they clearly made a mistake in applying the price change to current order holders. I think they are under seriously difficult constraints with covid, inflation, and supply lines, and I think we need to judge them with that context.

 

[Sgt Beavis]

so damn close!

hahahaha yea, it got down to 50.02 at one point.. but its a long day..

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