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WSJ Editorial: Rivian, the Government Unicorn

kurtlikevonnegut

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https://www.cnn.com/2021/11/14/economy/bezos-musk-feud-rivian-tesla/index.html

"Rivian, the electric truck maker that's rocketed overnight from relative obscurity to $100 billion Wall Street darling, owes much of its breakout success to one very powerful fanboy: Jeff Bezos. And, less directly, to that fanboy's archnemesis Elon Musk.... Whether Rivian can live up to the hype is anyone's guess. For an investor, it's a comfort to know that Rivian has the backing of someone with pockets as deep and grudges as bitter as Bezos'. Investing is always risky. But one thing we can count on is that uber-rich men will literally buy entire companies to spite their enemies rather than go to therapy."
I was talking to my father in law the other day and made this exact point. When you have the kind of money that Bezos and Musk have (more than can be spent in a lifetime) this type of pettiness is the only way they can compete and Bezos will allow his bet on the EV future (and thorn in Elon's side) to fold over his dead body.
 

Pherdnut

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Has Bezos ever uttered a word about Musk? I always had the impression their "feud" was a one-way thing.
 

Sgt Beavis

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Has Bezos ever uttered a word about Musk? I always had the impression their "feud" was a one-way thing.
Their rivalry has been around for years. But it really got heated up started when the two got into a pissing match on who launched the first reusable rocket booster. Since then, Musk has accused Blue Origin of being a copy cat of many SpaceX innovations. Frankly, the accusations have merit IMO. Also, Blue Origin tends to get sue happy with SpaceX over things like the drone ship landing pad, the Lunar lander contract, and even a challenge to Starlink's satellite design. That lunar lander lawsuit is one of the reasons that Project Artemis (our efforts to return to the moon) have been pushed back.
 

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AllInev

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Link to the editorial, though behind a paywall, my apologies
https://www.wsj.com/articles/rivian...lectric-vehicles-trucks-subsidies-11636669730

1st paragraph:
We live in the age of free money and endless government subsidy, which is the only way to explain the $100 billion public stock offering by Rivian this week. The electric truck maker has delivered a mere 156 vehicles, but investors are betting government won’t let it fail..........................................

Last paragraph:
This is an extraordinary moment. We are watching the government literally underwrite a new industry before our eyes, steering capital to EV makers come what may. In post-capitalist America, you can still become a billionaire overnight—if you’re in a business favored by politicians.

The authors seem really annoyed (maybe even whiny?) by Rivian's IPO success. Seem annoyed that Rivian is not getting points deducted by investors for having a non union plant, taking advantage of lenient rules allowing pre IPO emerging growth companies to skip some Sarbanes-Oxley requirements, and the fact that Amazon will get tax credits for buying EV delivery vehicles. The short editorial also mentions legal problems with Lordstown and Workhouse, implying possible concern for Rivian.

I agree, the valuation seems completely beyond explanation, and it might even make sense to short Rivian. But I don't see the valuation being due primarily due to US government tax credits. The tax credit was not a factor in my order (though I'm happy to take it). Investors see a chance to get in early (sort of) in a promising growth industry and technology. I expect US tax credits are a factor in how fast the technology is implemented, but a transisition away from ICE vehicles will continue even without tax credits and EV's are by far the most promising alternative.

I expect Rivian's founders will also be a little annoyed by the "become a billionaire overnight" comment.

Nice picture of a black R1T in the article.

One really good point: " The electric truck maker has delivered a mere 156 vehicles ". I'm rooting for Rivian to really pick this up now, though my interests are very self serving.
I wonder why the WSJ editorials never seem to complain about government incentives for the exploration and extraction of oil and natural gas?
 

thrill

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I wonder why the WSJ editorials never seem to complain about government incentives for the exploration and extraction of oil and natural gas?
Yeah, I cancelled my WSJ subscription back when Murdoch bought it. I have no interest in anything with his thumb on the scale.
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