$RIVN closed above its 200 day moving average for the first time

[DuoRivians]

We all know that you're great Rivian supporter.

You comment about vehicles over $90K being huge needs a context. By 2032, it's estimated that those vehicles will reach $12B+ baed on the reference you've provided. This is the global sales figure for all luxury makes and models. There are lots of specialized competition at these price range. People are looking for exclusivity and refinements, and uniqueness.

The 2022 global auto market was $2.9T, or 79.4M new vehicles. Rivian sold almost 25.000 in 2022 and 50,000+ this year. That's 0.06% (way less than 1%). Even if R2 target is reached, in 2026+, RJ has said they want to produce 1 million vehicles total.

In terms of stock price, or market cap (NPV/outstanding shares, or share price*total shares), going higher than the previous all time high would require something beyond what think Rivian is today.

Rivian would have to either expand their business beyond the current lines, and within their core competencies, or become high volume producer.

Porsche is a luxury brand with low production and various licensing, affluent products and racing to heighten their brand is valued at $110B.

Toyota is the largest producer, in terms of units, that owns not just Toyota group but significant holdings in other industrial companies (e.g., forklifts, steel...) as well as Subaru. its valued at $217B.

Getting past $170+/share (all time high), or market cap past $150B is a tall order for Rivian based on what we know today.

Not saying it will not happen. The enthusiasm took the stock price to the all time high just couple of days after the IPO. I would consider that to be a market anomaly rather than any fundamental or technical reasons. It's just that getting back there, let alone past it, requires much more than R2 success. As someone who owns few thousand Rivian shares, I hope you're right.

You can’t compare market caps of oems with huge debt to Rivian’s market cap.

If you want to compare to legacy oem, compare their enterprise values, not market cap.

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[Zeusy Zeus]

New short interest numbers will come out in a few days.

FYI - Short volume is not short interest.

Whoa 3 days to cover 80 mil? That’s bonkers good info man thanks!

 

[mkg3]

You can’t compare market caps of oems with huge debt to Rivian’s market cap.

If you want to compare to legacy oem, compare their enterprise values, not market cap.

Niether Porsche or Toyota have large debts. And both are far more complicated financially than Rivian. Besides I was not comparing Rivian's today's value with these two. Who knows how much debt Rivian will have get attain before it reaches R2 full production.

Rivian definitely doesn't have enough money to do that now, and cashflow will be shorter than needed. They may reach profitability before hand but that doesn't mean that they have enough to scale up R2.

If that's all you got out of it, you really missed the point.

 

[DuoRivians]

Niether Porsche or Toyota have large debts. And both are far more complicated financially than Rivian. Besides I was not comparing Rivian's today's value with these two. Who knows how much debt Rivian will have get attain before it reaches R2 full production.

Rivian definitely doesn't have enough money to do that now, and cashflow will be shorter than needed. They may reach profitability before hand but that doesn't mean that they have enough to scale up R2.

If that's all you got out of it, you really missed the point.

Dude, check how much debt Toyota has.

 

[Zeusy Zeus]

Dude, check how much debt Toyota has.

Holy smokes I just checked and as of March 2023 they have 220B debt yikes. In comparison Tesla only has 1.27B in debt and Rivian is at 2.71B. ?

 

[mkg3]

Dude, check how much debt Toyota has.

Ok Toyota has long-term debt. Still not the point. Enterprise value is one metric, just as the book value or market cap are. Stock price do not follow either enterprise or book values.

Point is your statement for Rivian to be worth more than the all time high without any substantiation.

Like I'd said, what is the catalyst to drive Rivan stock past the all time high?

 

[DuoRivians]

Ok Toyota has long-term debt. Still not the point. Enterprise value is one metric, just as the book value or market cap are. Stock price do not follow either enterprise or book values.

Point is your statement for Rivian to be worth more than the all time high without any substantiation.

Like I'd said, what is the catalyst to drive Rivan stock past the all time high?

Dude…

Enterprise Value = Equity Market Cap + Debt - Cash

It represents the entire value of the company. From that, you can see how much is captured by debtholders and how much by equity holders.

Enterprise value and market cap are literally defined by this formula.

You really need to brush up on financial valuations of companies and how all this works.

Translation: Toyota has a huge company value, but a significant value is captured by debtholders.

Whereas in Tesla or Rivian, the company value is mostly captured by equity holders, since there’s very little debt

 

[mkg3]

Dude…

Enterprise Value = Equity Market Cap + Debt - Cash

It represents the entire value of the company. From that, you can see how much is captured by debtholders and how much by equity holders.

You really need to brush up on financial valuations of companies and how all this works.

Enterprise value and market cap are literally defined by this formula…

Look, you keep listing what you find on the web instead of provide no real insight to the your claim. Company values can be defined in many different ways.

Since money has been essentially free for over a decade (real interest rates), many companies takeout debt so that they can invest free cashflow into higher return vehicles. Apple has routinely taken debt to pay dividends. Clearly with ~$200b in cash/cash equivalent, they don't have to borrow. Debt is not necessarily a bad thing, if done smartly.

I am fully aware how to calculate enterprise value, book value as well as how stocks are supposed to be priced at (NPV of future earnings/outstanding shares).

Before you start making claims about how I need to brush up on things, how about giving us the reason why you think Rvian stock will surpass all time high, as you claim?

 

[DuoRivians]

Look, you keep listing what you find on the web instead of provide no real insight to the your claim. Company values can be defined in many different ways.

Since money has been essentially free for over a decade (real interest rates), many companies takeout debt so that they can invest free cashflow into higher return vehicles. Apple has routinely taken debt to pay dividends. Clearly with ~$200b in cash/cash equivalent, they don't have to borrow. Debt is not necessarily a bad thing, if done smartly.

I am fully aware how to calculate enterprise value, book value as well as how stocks are supposed to be priced at (NPV of future earnings/outstanding shares).

Before you start making claims about how I need to brush up on things, how about giving us the reason why you think Rvian stock will surpass all time high, as you claim?

NPV discounted by WACC equals enterprise value, not stock valuation.

I am making claims to brush up because you have spewed many false things here (eg Toyota doesn’t have large debt, equity market cap and enterprise value aren’t related) and before, which is why you’ve been ignored by me.

Rivian has a strong chance to be a formidable #2 EV company in the US and top 10 globally.

Legacy OEMs don’t have a chance.

If Tesla has a ~$850B valuation, Rivian’s hitting $150B over the next five or so years isn’t unreasonable.

 

[mkg3]

NPV discounted by WACC equals enterprise value, not stock valuation.

I am making claims to brush up because you have spewed many false things here (eg Toyota doesn’t have large debt, equity market cap and enterprise value aren’t related) and before, which is why you’ve been ignored by me.

Rivian has a strong chance to be a formidable #2 EV company in the US and top 10 globally.

Legacy OEMs don’t have a chance.

If Tesla has a ~$850B valuation, Rivian’s hitting $150B over the next five or so years isn’t unreasonable.

You really should stop. WACC, or commonly called hurdle rate is used to calculate the NPV. WACC can be debt-based or equity issued or combination thereof.

The reason I didn't think Toyota had much debt is because their debt-to-equity ratio is about an average for the auto manufacturers. So one mistake does not equal to "many false things" as you say. My bad...

So your thesis is that Rivian will be strong and formidable #2 and just because Tesla, with many businesses beyond autos, is valued highly so Rivian will too - Got it.

All auto makers will be EV company over the next 10~15 years. So for Rivian to be #2, they will need to make lot more than current stated goal of about a million/yr.

If you recall in my original post, the world produces roughly 79M vehicles/yr. It's tough to get to #2 with BYD, VW Group (all of their brands), and handful of OEMs that will survive the switch to electrification. GM and F's days are probably numbered, unless something drastically changes for them and/or have another government bailout to prop them up.

Like I'd said, hope your right for all of us shareholders' sake.

Thank you Professor DuoRivians for the enlightening lesson...

 

[DuoRivians]

You really should stop. WACC, or commonly called hurdle rate is used to calculate the NPV. WACC can be debt-based or equity issued or combination thereof.

The reason I didn't think Toyota had much debt is because their debt-to-equity ratio is about an average for the auto manufacturers. So one mistake does not equal to "many false things" as you say. My bad...

So your thesis is that Rivian will be strong and formidable #2 and just because Tesla, with many businesses beyond autos, is valued highly so Rivian will too - Got it.

All auto makers will be EV company over the next 10~15 years. So for Rivian to be #2, they will need to make lot more than current stated goal of about a million/yr.

If you recall in my original post, the world produces roughly 79M vehicles/yr. It's tough to get to #2 with BYD, VW Group (all of their brands), and handful of OEMs that will survive the switch to electrification. GM and F's days are probably numbered, unless something drastically changes for them and/or have another government bailout to prop them up.

Like I'd said, hope your right for all of us shareholders' sake.

Thank you Professor DuoRivians for the enlightening lesson...

I applaud your concerted efforts to not take an L here

 

[Zoidz]

Bypassing all the financial formulas, the fundamental question is whether Rivian should be compared to legacy companies (such as Toyota which is being done here) or compared to Tesla. Will Rivian evolve and grow like Tesla, or will they wallow in falling margins and growing competition? Who knows? The potential is there for growth in multiple areas - the ABRP acquisition proves they are open to growth by aquisition. They are expanding with new business in Europe. The potential exists to develop new variations/markets for the EDV line (motor homes, buses, etc). They could create OEM versions of the Enduro motor for sale to smaller manufacturers, just as Lucid and Aston Martin have done. If scenarios like this are in Rivian’s future, today‘s valuation methods are only partially relevant.

 

[mkg3]

I applaud your concerted efforts to not take an L here

Ha ha. You really are something.

We’ll go with that…

 

[Count Orlok]

If I sell my IPO shares now my post-IPO shares will cover the loss plus 5k. Very tempting.

 

[Zeusy Zeus]

If I sell my IPO shares now my post-IPO shares will cover the loss plus 5k. Very tempting.

I’m holding strong… but don’t really have a choice since I’m still down 50% ??

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