RIVIAN STOCK

[DJG]

According to CNBC, “puts” on Rivian outnumber buys 2:1 and will keep driving the price lower. Not nice for Ford to now sell its 8M shares. I am not sure at what point they will become a take over target.

Being a takeover target is more than just a low stock price. It requires board and shareholder approval, which would only be given if they believed the price being offered represented the best interest of shareholders, i.e. a valuation not likely to be achieved otherwise. It would require the belief that the share price was a result of failings of the company and management itself more than the general market. And not just that, but structural and unfixable failures.

So, a low stock price due to generally negative conditions, particularly for early stage growth tech stocks, is just one part of the puzzle.

A buyout offer would likely need to be higher than the IPO price, which would be a ridiculous premium (generally they are in the realm of 25%-30%). The value of a single share, or block of shares, sometimes has nothing to do with the value of all the shares. I know what my vote would be if there was a buyout offer for $30/share...

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[St Bernard]

Being a takeover target is more than just a low stock price. It requires board and shareholder approval, which would only be given if they believed the price being offered represented the best interest of shareholders, i.e. a valuation not likely to be achieved otherwise. It would require the belief that the share price was a result of failings of the company and management itself more than the general market. And not just that, but structural and unfixable failures.

So, a low stock price due to generally negative conditions, particularly for early stage growth tech stocks, is just one part of the puzzle.

A buyout offer would likely need to be higher than the IPO price, which would be a ridiculous premium (generally they are in the realm of 25%-30%). The value of a single share, or block of shares, sometimes has nothing to do with the value of all the shares. I know what my vote would be if there was a buyout offer for $30/share...

Based on the price now If the stock goes to $17 after hours a 30% premium would be just over $22. Would a GM or other major Car Mfg step in to buy the company?

 

[DJG]

Based on the price now If the stock goes to $17 after hours a 30% premium would be just over $22. Would a GM or other major Car Mfg step in to buy the company?

That's not the question, it's whether the board/investors would sell for $22. Why would they do that? Why would the big investors who bought in at the IPO at $78 six months ago with a long time horizon of probably 5-10 years, sell for that or anything remotely close to it now, when not much has really changed regarding the long term value of the company?

 

[jjswan33]

That's not the question, it's whether the board/investors would sell for $22. Why would they do that? Why would the big investors who bought in at the IPO at $78 six months ago with a long time horizon of probably 5-10 years, sell for that or anything remotely close to it now, when not much has really changed regarding the long term value of the company?

Also recall that RJ has special voting rights, I forget the number but each of his share is like 5 votes or something like that. So no buyout will happen unless RJ is on board.

 

[DJG]

Also recall that RJ has special voting rights, I forget the number but each of his share is like 5 votes or something like that. So no buyout will happen unless RJ is on board.

Right. Basically for them to decide to sell, they'd have to be admitting that they just can't figure out manufacturing, and the company/brand is better in the hands of someone else like major Auto, six months after telling the world they could. It just makes no sense and won't happen anytime soon, regardless of the stock price.

OR, it's a PE group that recognizes that while the successful IPO provided a great infusion of cash, the short term focus/scrutiny of being a public company is detrimental to the execution and is best achieved as a private company again, with the goal of relisting at some point in the future as a mature company, like what the stock market used to be for. But again, they would have to pay a ridiculous premium to convince the board/investors to give up their shares/control. Probably something north of $100/share.

Interestingly, the one that actually makes the most sense is Tesla, because while also beaten down, their valuation is still so high that they could offer stock as the currency to buy them out. They would add product lines they don't already have (the X is a minivan if we're being honest).

 

[NY_Rob]

The BIG investors got in waaaay blow the $78 IPO price, more like in the $20's or teens IIRC.

Ford got 102 million Rivian shares for an aggregate 802 million dollars.

Only us suckers bought in at $78.

 

[jakef801]

Admittedly, I haven't read this whole thread - too much going on. But what I see people on this forum and on news reports failing to mention is that Amazon is Rivian's biggest backer. They have an order for 100,000 delivery vans, so they have an extremely vested interest besides the shares they hold. Also, it has been reported that the governor of Georgia has awarded Rivian a $1.5 Billion incentive package for their new plant site - the largest in the state's history. The governor is 'head over heels' excited about the prospect of the creation of 7,500 new jobs in his state. There is no reason to believe that Rivian won't break ground on the massive, 2000 acre plant this summer. If you haven't seen the site plan, it's definitely worth a look - it's an absolute behemoth. Rivian isn't going anywhere. I bought more stock today to average down my basis. One other side note - Tesla was a $5 stock a mere 12 years ago as they were getting going. Here's a quote on the report on the Georgia incentive package:

Electric-pickup maker Rivian Automotive Inc. will receive $1.5 billion in state and local incentives to build a massive plant near Atlanta, bolstering the company’s production efforts despite local resistance to the project.

The package, the biggest in Georgia history, consists of tax credits, abatements and subsidies like site preparation and job training support from the state, according to a statement by the Georgia Department of Economic Development on Monday.

 

[Nermal]

At what point does a stock price become an existential issue even while Rivian has pretty good cash balance? Or does it?

The current downward trend seems even more dire sentiment than their significant challenges warrant. I’d hate for crashed stock price to be a challenge unto itself simply because the market wants them punished for being once highly and irrationally valued.

$20b mkt cap seems a reasonable place to just leave them alone and let them focus on the business. We’re well below that at the moment.

 

[jakef801]

Up 26% intraday currently - the market obviously liked what they had to say yesterday. They affirmed that they are still on track to produce 25,000 vehicles in 2022 and that the Georgia plant will be breaking ground this summer. Like I said above, Rivian isn't going anywhere - I'm long on Rivian. You can hear their business and earnings webcast from yesterday at this link: https://rivian.com/investors

Again, remember that Tesla was a $5 stock 12 years ago folks.

 

[kurtlikevonnegut]

Up 26% intraday currently.

Hopefully some of those people with puts are feeling the pain right now. The only way to break them is for the stock to perform well and hit them where it hurts.

 

[MXA121]

Surprised to see pre market climbing further with news of recall yesterday. I expected a sharp backlash.

 

[DJG]

Surprised to see pre market climbing further with news of recall yesterday. I expected a sharp backlash.

This particular recall was both not expensive and not their cause, thus why it doesn't really affect the perception of the company/product. It's relatively few vehicles, and is just a warranty claim being passed onto Hyundai to replace the seats. Far outweighed by the earnings call positivity and a realization that the company was valued $8b less than Lucid despite doing far better in production and with years more cash on hand, in addition to more products and more demand.

 

[jakef801]

Surprised to see pre market climbing further with news of recall yesterday. I expected a sharp backlash.

Apparently not, still doing well today. Perhaps because the tech heavy NASDAQ is on fire. However, most of the major analysts received the earnings call positively. Out of 8 highly regarded firms, they either maintained a "buy" status (overweight, outperform, etc). One upgrade by Paribas from "underperform" to neutral. Deutche Bank, Wedbush, Mizuho, RBC, and Piper Sandler were among the bigger names that have "buy" to "strong buy" ratings. Barclays & Wells Fargo maintained "neutral" ratings.

Recalls, mechanical issues, and especially new vehicles these days are completely expected on 1st generation, initial deliveries. What used to be a carbureted engine, manual transmission, drive train, and 4 wheels is now a very complex system of computerized mechanisms and monitoring systems. EVs especially, but all new vehicles these days. Guess this all goes without saying, but I'm in a commenting Friday mindset today...ha ha.

 

[Jumacao]

Welp, looks like Monday might be another buying opportunity. https://www.wsj.com/articles/ford-u...n-electric-vehicle-startup-rivian-11652536603

 

[SANZC02]

Welp, looks like Monday might be another buying opportunity. https://www.wsj.com/articles/ford-u...n-electric-vehicle-startup-rivian-11652536603

That 7 million sold on Friday, it is not a sell order for next week.

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