Cramer issues a sell on Rivian stock

[Longreach]

We've gotta be approaching cash value of their shares, right? $13 billionish cash on hand, how many shares issued?

Yes, market cap is about $15b, so close to cash value. But they’re going to spend it all regardless, so not a useful measurement.

Better to look at it in context of its peers. Rivian is currently worth about 1/3 of Ford or GM or Stellantis, all of which have strong existing sales and competent EV programs (some more ahead than others). It’s all about whether you believe Rivian have enough unique capabilities or potential (commercial volumes, second generation) to end up being bigger than 1/3 the revenue & profit of those companies.

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[dfx]

Lots of Rivian stock was just dumped last month for capital loss harvesting. It was a great stock to harvest losses with if purchased in the first quarter of 2022 or earlier. Now is a fantastic time to buy.

It's valued at a bit more than cash on hand but unlike many startups the company has little debt. There's the major issue of the burn rate but as you point out there's been a lot of tax loss selling as well as sector abandonment due to the free for all at Tesla. It's a classic setup for a good entry point with the stock being way oversold. Nice timing by Cramer, he attempts to be an expert on hundreds of stocks and fails quite often.

 

[dfx]

Yes, market cap is about $15b, so close to cash value. But they’re going to spend it all regardless, so not a useful measurement.

Better to look at it in context of its peers. Rivian is currently worth about 1/3 of Ford or GM or Stellantis, all of which have strong existing sales and competent EV programs (some more ahead than others). It’s all about whether you believe Rivian have enough unique capabilities or potential (commercial volumes, second generation) to end up being bigger than 1/3 the revenue & profit of those companies.

True but it's helpful to look at enterprise value as well. GM has an EV of over $130 bil. The current share price of GM also is pricing in a recession. I think both companies are a buy here

 

[Count Orlok]

who?

 

[jjswan33]

Yes, market cap is about $15b, so close to cash value. But they’re going to spend it all regardless, so not a useful measurement.

Better to look at it in context of its peers. Rivian is currently worth about 1/3 of Ford or GM or Stellantis, all of which have strong existing sales and competent EV programs (some more ahead than others). It’s all about whether you believe Rivian have enough unique capabilities or potential (commercial volumes, second generation) to end up being bigger than 1/3 the revenue & profit of those companies.

While true that they will spend it but after they do they will have service infrastructure, charging infrastructure and a second manufacturing space. Those things bring in revenue streams that the peers (F, GM, etc) you mention don’t have, in fact they have extra mouths to feed along with large pension obligations so they shouldn’t necessarily be valued the same.

In the end the value of those funds will be how effectively they can use that capital to increase revenues and get higher profit margins. Right now the message (in the RIVN stock price) is that the market doesn’t think they can do that, time will tell.

 

[SANZC02]

While true that they will spend it but after they do they will have service infrastructure, charging infrastructure and a second manufacturing space. Those things bring in revenue streams that the peers (F, GM, etc) you mention don’t have, in fact they have extra mouths to feed along with large pension obligations so they shouldn’t necessarily be valued the same.

In the end the value of those funds will be how effectively they can use that capital to increase revenues and get higher profit margins. Right now the message (in the RIVN stock price) is that the market doesn’t think they can do that, time will tell.

Rivian also does not have the middleman. The MSRP is what Rivian is getting per vehicle, the mainstream manufacturers have a dealer cost - dealer holdback that they get. This means the Tesla/Rivian/Lucid direct sales model will have a higher margin per sale.

 

[lefkonj]

Cramer is a piece of sh!t. All he does is help himself and his rich friends make money with shorts on stocks.

 

[Yossarian]

edit: misspelling
Mr Cramer's track record with respect to equities is, shall we say, not particularly enviable. This has been amply demonstated multiple times over more than a decade, yet he still has both his show and a corps of followers. A quick online search with the terms "Jim Cramer" and "Jon Stewart" will turn up a trove of more than amusing Youtube videos that are well worth watching.

 

[atebit]

I gave up on him after he issued his “Abandon Ship!” call on Stark Industries.

 

[Sgt Beavis]

Another 52week low today but yea I'm in agreement with most here. Cramer is an entertainer. His advice is usually garbage. I wouldn't be surprised if RJ was too busy to be on his show and it ticked Cramer off.

 

[COdogman]

Cramer is literally a clown performing at his own circus. He's the Carrot Top of stock market news.

 

[Dark-Fx]

Bear Sterns is fine.

 

[mkg3]

Unfortunately, he is past the expiration date on his calls.

He is out of touch with current generation majority and how they think about things.

This is a true case of he only knows what he knows, albeit a lot, and he doesn't know what he doesn't know. Yet he speaks as though he does....

 

[Biturbowned]

Ferrari ($RACE) mkt cap is $40 B, I feel pretty good about $RIVN at $15B. Not financial advice.

 

[Donald Stanfield]

I’m surprised that people haven’t figured out that people like Cramer and the MSM in general isn’t meant to serve you as John Q. Public. They serve their corporate interests and push out information that their corporate overlords choose to let us proles have access to.

None of these people will give YOU good advice as the general public aren’t their target beneficiaries

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