Is this stock doomed?

[s4wrxttcs]

Username checks out. Troll.

Their occupation is healthcare worker. So I can understand their overall cynicism.

I do share my own frustration with the stock.

A few months ago I sold my stock because I was at the break even point. I was a bit torn because I felt like the R1S would continue to sell like hot cakes. That eventually investors would wake up to the fact that it was a potential money tree. But, at the same time I felt like their was an overall lack of enthusiasm for Rivian stock. That it was a REALLY long play.

I ended up selling and moving the money into buying a house (which I probably screwed up the timing of the purchase, but bad timing isn't anything new for me).

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[SANZC02]

Ok....show me what the positive gross profit is per vehicle.

They have not publicly released the actual cost of materials and labor per vehicle so I do not have those numbers to share.

Just think of it logically. If it truly cost more to build a vehicle than they can sell it for then as they ramp up the manufacturing then their loss per quarter would get higher the more vehicles they made. Yes the material cost goes up the more vehicles are made yet their quarterly loss as well as loss per vehicle is shrinking. The only way that could possibly happen is if they are selling the vehicles for more than the actual cost to build each one.

 

[evguy]

You can't actually be upside-down on a loan if you have more than the loan in savings. You're always going to be net positive.

This notion of being against using credit comes from emotion, and not logic.

There isn't anything necessarily wrong with that because it counteracts two other things that come from emotion.

The first is its hard for humans to consistently act logically. So tying up money into a purchase removes the ability for the person to use that money for some other unnecessary purchase. Like the other day I was thinking about what my Rivian R1T really needs, and I got it into my head that it was a boat. Luckily I tied up my money into the purchase of the Rivian so no boat for me.

Secondly its an antidote to "We'll just leave the list price the same, but offer great financing" sales trick that automakers will use to trick us into continuing to buy cars. If people don't budge on this it forces them to lower their prices.

I, too, will probably scoff at financing a vehicle purchase once I'm old enough to draw from my retirement account without penalty. Until then, I'll just be grateful that the rate on my Rivian loan is nearly as low as my ridiculously low mortgage rate! But what do I know, I am just a working stiff on the younger end of Gen X..... (that's the one between Boomers and Millenials that everyone seems to forget about)

 

[Donald Stanfield]

Partly depends on the luxury item and interest rate. If someone offered me a Rolex at 0% for any term, I'd be crazy not to do that. Just a hypothetical.

Depends on which Rolex. Most of them depreciate and aren't at all collectable. I have a nicer watch but I bought it knowing that it was not at all an investment.

This is pretty silly. My R1T is 100% financed because rates were lower than inflation. Instead I put the full purchase price of the car into the market. Do you think I wish I'd paid cash? Absolutely not.

99% of people with a loan don't do this. Sure it makes sense assuming what you're invested in has a higher rate of return than the interest which is a gamble because with the way the market has been lately stocks and mutual funds have been losing. If your rate is low enough or 0 then of course it doesn't matter. My cousin just financed a tractor at 0% and put the money in a CD so I get the strategy.

 

[Donald Stanfield]

Perhaps we are in the "old fashioned" category here but I agree 100%. If you have to buy a car on a loan, you simply can't afford it. Sorry if that means not having a shiny new Rivian (insert car of choice) today but doing instead something called "saving up"!

A by-product of recent cheap credit and people trying to keep up with the Jones's ... got to be seen in a brand new Range Rover I don't actually own rather than a 2nd hand Rav4 i should be in.

oh and to answer the OP, yes of course, all EVs are doomed. Rivian is doomed. Quick sell your stock, car, everything. Jeez ...

Yeah the definition of afford is different for everyone of course. For me my Rivian is solidly in the want category my paid off diesel truck would have been much better so in order to feel comfortable with what I consider a splurge I need to pay outright for it.

 

[Doomsday]

44 is my average. Feels like I might have to wait a few years- I guess I’m ok with that as long as they don’t screw up big time and bring it below $15 all over again- then I would just be completely pissed at myself for making this bad investment.

 

[NineElectrics]

They produce an income statement like every other public company. $1.121 billion in revenue and $1.373 billion cost of goods for the last reported quarter. They've been working on getting the number less negative but it's still negative. And of course when you add in G&A expenses it's very negative.

I think that Rivian has very little negotiating power with suppliers, so their costs were initially very high, because their volume was low. As their suppliers do more volume with Rivian and recoup their costs, Rivian can then negotiate a cheaper unit cost. If that’s true I expect margins to continually improve until the R2, when the game starts over. The more parts R1 and R2 can share, the better.

 

[Count Orlok]

You can't actually be upside-down on a loan if you have more than the loan in savings. You're always going to be net positive.

This notion of being against using credit comes from emotion, and not logic.

There isn't anything necessarily wrong with that because it counteracts two other things that come from emotion.

The first is its hard for humans to consistently act logically. So tying up money into a purchase removes the ability for the person to use that money for some other unnecessary purchase. Like the other day I was thinking about what my Rivian R1T really needs, and I got it into my head that it was a boat. Luckily I tied up my money into the purchase of the Rivian so no boat for me.

Secondly its an antidote to "We'll just leave the list price the same, but offer great financing" sales trick that automakers will use to trick us into continuing to buy cars. If people don't budge on this it forces them to lower their prices.

You do you and this reply is not a disagreement with your points. The Count, however, has gotten to the place where there is little in the world he needs or wants that needs to be financed.

The Count is not anti debt or credit (as most people know, he has seven figures of "available" credit). In fact the financial services industry is why he and The Countess are now free to roam as they please.

The Count worries for people who are "payment buyers" and/or don't understand opportunity costs as well people lacking a plan for long-term financial stability.

Put it this way, if Ford were to offer The Count 3.9% on his Lightning and The Count could earn 5% on the money the $$ difference isn't enough to excite him over simply owning the vehicle.

 

[Nsblifer]

Financing or paying cash, if we want to get technical and get on our frugal high horse; none of us (by rule of thumb) should be purchasing any vehicle in which price exceeds 35% of pre-retirement or post-retirement gross annual income. Meaning if you did not or do not make over 250-270k/yr you have indulged. Also meaning those who “technically” purchased w/o indulging would, in most cases, not qualify for EV tax credits either.

 

[izgoy]

The Count completely agrees although if someone with high enough income to justify 100k on a car financing for 36 months or less he can accept that.

The Count hasn't had a car loan for so long there aren't even closed auto tradelines on his consumer credit reports.

That said, if RIVN falls below 13 again The Count will be a buyer.

Who the hell is the Count? I know of a few people speaking about themselves in third person. Czar Nicolas II and Joseph Stalin being an example.

 

[Redline]

Got an upgrade this morning from Cantor.

https://beststocks.com/cantor-fitzgerald-upgrades-rivian-automotive/

 

[izgoy]

Sanctimonious as heck. Lots of folks have plenty of cash and other liquid-ish assets, but if you can get a loan below your expected rate of return on those (2.5% loan, 5.3% money market?) there's no real reason not to take the loan.

On 5.3% money market (that’s actually is one of those accounts you put money in and can never get customer service - so be my guest; I went with a real bank at 5%), you have to pay tax (state and federal). So, by the time you’ve paid the tax, it’s not 5.3% anymore. Then you factor in inflation, and you are lucky to stay above the water. As for the 2.5% loan, where do you get it on a vehicle in high demand? Nonetheless, it’s 2.5% in paid interest (if you can get it) vs barely 1% in earned interest (after you’ve paid the taxes and factored in inflation).

I agree, if you can’t afford any luxury car (or any new car for that matter) for cash, you shouldn’t own it because owning a fancy car on loan or financing it makes you even more poor. Others may not know it when they see you in your vehicle, but you know it. You are making the bankers rich and yourself poor. And that’s what the society and the culture want you to do. They want you to be in perpetual debt for everything you use because that’s how the people who rule this country get even richer.

 

[izgoy]

This is pretty silly. My R1T is 100% financed because rates were lower than inflation. Instead I put the full purchase price of the car into the market. Do you think I wish I'd paid cash? Absolutely not.

And how did you do in the market? Was it flee market or farmers market? The stock market has done nothing in the past two years.

 

[izgoy]

Rivian may survive, but Rivian stock may be in the gutter forever. Look at the GM and Ford stock. The companies survived, the stock is sad. There are plenty of profitable companies whose stock is not doing well. Take Cisco or IBM as an example.

 

[Yellow5]

Those are both possible scenarios, but less likely than either of the other two options. There is a frontrunner RIVIAN is chasing. At present, RIVIAN production is a small multiple of the frontrunner in most ways. It will take time to close the GAAP, if that is even possible or a goal. RIVIAN has what it takes to be a very popular choice in the electric space.

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