Rivian's Future

[the long way downunder]

I think you are conflating our investment in DSP with Rivians IPO. Do you think Rivian should have waited to IPO until the market wasn't as hot (like now) and there was more competition to IPO? As it stands Rivian raising 12-13 billion in IPO seems like it was nearly best case scenario.
Rivian IS "in trouble" from the standpoint of an extremely tough auto manufacturing environment, competition coming in hot and heavy and launching multiple new products of enormous magnitude simultaneously and having zero experience as a company. I'm not surprised it's a bumpy ride. If they succeed we will be rewarded with awesome trucks, service after the sale, and stock gains.

Describing the $100 to $170 to $50 price, "backfired" would be better word than "bungled."

I didn't refers to the DSP; fwiw, the DSP is a purchasing method in the IPO, the two are inextricably intertwined.

I don't know about the $12-13B number – at $50 today, $RIVN has a market cap of $50B (twice the valuation of $F a year ago) and a number it cannot justify for years to come, but the speculator expectation (including my own) is that 2022 is the "tip of the iceberg" view of Rivian, which has already stated goals of multiple other passenger and light commercial vehicles, static (solar, grid, home) battery and presumably goes wherever the EV market goes (recreational vehicles, powersports, autonomy, robotics) but probably not following Tesla into SpaceX, Starlink or Boring. So I don't expect a trillion dollar Rivian in the next 10 years … : )

The "trouble" I refer to is the way the price of $RIVN, like the stock price of all household name, widely held companies, becomes the barometer of their success. The public perceives any company as "in trouble" when its stock price falls. The broad brush of investor sentiment should not be swept across Rivian as reality checks bounce, but Gamestop and even Netflix, don't.

Nobody outside the company – and perhaps most employees inside Rivian – knows what's going on with production or progress towards stated goals. Production is said to be 200 units per week. Investor relations at Rivian really needs to get in front of the news cycle and at least participate in shaping the narrative.

Two boiling pots of trouble ahead are:
1) The prospect of Ford liquidating their 12% stake at fire sale prices ($50) and
2) the Rutledge litigation.

Ford CEO Jim Farley says they're not selling, so that hangs over Rivian indefinitely. I think Ford would be foolish to sell $RIVN at $50 or any time soon.

I smell nefarious rats "anonymously" behind the curtain of that attempt to disrupt Rivian's plans and foment FUD for short sellers, and for auto industry competitors.

I'd be interested to see up to date facts about Rivian – all we've got is opinions and assertions originating outside the company and echoing through the EV bloggers and finance sites (which tend to copycat verbiage, so I suspect a lot of unoriginal reportage.

Sponsored

 

[wizard467]

Describing the $100 to $170 to $50 price, "backfired" would be better word than "bungled."
Two boiling pots of trouble ahead are:
1) The prospect of Ford liquidating their 12% stake at fire sale prices ($50) and
2) the Rutledge litigation.

Ford CEO Jim Farley says they're not selling, so that hangs over Rivian indefinitely. I think Ford would be foolish to sell $RIVN at $50 or any time soon.

Actually at this point it really doesn't matter what Jim Farley says, legally they (and any other pre-IPO holders) can't sell until 180 days after the IPO which is May 2022.

And I can assure you Rivian doesn't (and at this stage really shouldn't) care about their stock price. Rivian made money on the stock ONLY based on the initial IPO price. Rivian can't directly make money or lose money on their stock anymore. Right now they don't need to go on a big marketing campaign, they don't have to fight all bad press; all they have to do is work on raising production numbers.

The adage that a company's stock price shows its health is definitely "true", but for a startup car company its health for the first few years is only measured on delivery of vehicles. All that matters is deliveries in 2022.

For Rutledge/GA if they really do stall enough there are other sites to consider. There are always alternatives.

 

[the long way downunder]

Actually at this point it really doesn't matter what Jim Farley says, legally they (and any other pre-IPO holders) can't sell until 180 days after the IPO which is May 2022.

And I can assure you Rivian doesn't (and at this stage really shouldn't) care about their stock price. Rivian made money on the stock ONLY based on the initial IPO price. Rivian can't directly make money or lose money on their stock anymore. Right now they don't need to go on a big marketing campaign, they don't have to fight all bad press; all they have to do is work on raising production numbers.

The adage that a company's stock price shows its health is definitely "true", but for a startup car company its health for the first few years is only measured on delivery of vehicles. All that matters is deliveries in 2022.

For Rutledge/GA if they really do stall enough there are other sites to consider. There are always alternatives.

I've been in three startups (two successful) and while it's "culture" to ignore the stock price, the practical reality is the board meets with the VCs and there's really only one topic.

As for production numbers, that's one core metric, but they need the business firing on all 8 cylinders – from suppliers, especially batteries, to initial quality and production line efficiency to deliveries, service and support, the charging network and the whole soup to nuts customer ownership experience. So far, so good. The only flaw right now is investor relations.

As for Ford, that's what Farley was talking about – when they end the lock out, they don't intend to sell. I imagine there's some fine print that they have to use a sell program (that preserves the price) and they could well continue to hold with the same speculative interest as any investor plus the longer term potential for another joint venture with Rivian. Seems to me Ford must see the potential for $RIVN and the potential for Rivian – they should see themselves as ideally situated. I feel like selling Rivian now will turn out like selling Apple at the end of the 90s.

 

[skyote]

but they need the business firing on all 8 cylinders

*high amperage on all 4 electric motors

?

 

[Chgroth]

By a show of hands, how many think that Rivian will not have Tesla-like issues with ramping up production, quality control and customer service?

If you think they will have those problems, do you think the stock is worth anything like current or past values as other manufacturers switch to EVs?

 

[Chgroth]

By a show of hands, how many think that Rivian will not have Tesla-like issues with ramping up production, quality control and customer service?

If you think they will have those problems, do you think the stock is worth anything like current or past values as other manufacturers switch to EVs

They are highly likely to have similar problems as a new company launching products for the first time. The severity of these issues is tough to gauge. The current valuation of <$60 is much more appropriate than the crazy high values immediately following the IPO. That said, they have a great product and should be successful over the long term with a valuation that will ultimately reflect that.

 

[Trekkie]

By a show of hands, how many think that Rivian will not have Tesla-like issues with ramping up production, quality control and customer service?

If you think they will have those problems, do you think the stock is worth anything like current or past values as other manufacturers switch to EVs?

One of the issues that lead to production hell for Tesla was they thought they could make a better factory too. Instead of following convention they tried to do some complex three-dimensional chess type thing and it backfired, and they quit and went back to regular manufacturing.

If Rivian skips that part, they will still have production challenges but I think at least six months of Tesla's production hell was not giving up on that, based on the folks that have written stories about that time.

 

[ads75]

One of the issues that lead to production hell for Tesla was they thought they could make a better factory too. Instead of following convention they tried to do some complex three-dimensional chess type thing and it backfired, and they quit and went back to regular manufacturing.

If Rivian skips that part, they will still have production challenges but I think at least six months of Tesla's production hell was not giving up on that, based on the folks that have written stories about that time.

I'm sure Ford, being a large investor, also helped Rivian with the Factory. That was probably one of the main reasons Rivian wanted a legacy manufacturer as an investor.

Sponsored