Shareholder Lawsuit

[OEVA]

Any accountants here? I have been wondering if Rivian will get in trouble with the IRS. They gave employees cars that were undervalued to forego taxes. It seems to me that employees got $12k-$20k in additional compensation that was not taxed.

Where are you finding this info?
Everything I have seen was that an additional $1K per month for 2 years towards the purchase of a Rivian was part of a compensation package offered to some (many?) employees. This most definitely would be considered income for the employees and taxed accordingly.
They purchased at the same price as those currently being delivered, - no special reduced pricing.

Sponsored

 

[kanundrum]

Charles Larry Crews, Jr. v. Rivian Automotive, Inc., No. 2:22-cv-01524 (C.D. Cal.) and is brought on behalf of investors that incurred damages on their purchases in Rivian common stock pursuant to or traceable to Rivian’s Initial Public Offering (“IPO”) on November 10, 2021.

https://www.blockleviton.com/active-cases/active

Looks like standard investigation period to see if there is actual Merit

https://www.blockleviton.com/case

 

[Longhorngirl]

Where are you finding this info?
Everything I have seen was that an additional $1K per month for 2 years towards the purchase of a Rivian was part of a compensation package offered to some (many?) employees. This most definitely would be considered income for the employees and taxed accordingly.
They purchased at the same price as those currently being delivered, - no special reduced pricing.

I agree that employees will be taxed on the stipend As it is compensation. I was just merely curious as to why the price increase was being implemented after all the employee deliveries were made. I understand that they rolled backed the price increases, but if they hadn’t, it makes the timing of the price increase Interesting.

 

[Robotpedlr]

Person filing suit definitely seems like a money grabbing ambulance chaser. He had a very minimum investment. "Plaintiff purchased 35 shares of the Company's common stock on November 10, 2021, at a price of $112.83 per share."

 

[Taycanfrank]

Rivian definitely opened themselves up for this one, so it's not quite as "ambulance chaser" as these lawsuits can be.

The Laura Schwab part of this makes the suit interesting. She has already said in legally filed documents that Rivian knew before the IPO that they'd raise prices after. Pretty bad look.

In the end, though, they have so many excuses to throw at this. Supply chain issues, inflation, blah blah, that I doubt it goes anywhere.

 

[nc10]

https://www.reuters.com/legal/trans...back-electric-vehicle-price-hikes-2022-03-08/

What are your thoughts? This is concerning to me and the downward lows of RIVN.

I still want my R1S. Lol

" claimed the company misled investors in its initial public offering about how it had mispriced its electric vehicles, "

I don't remember anything in the IPO or roadshow presentation about Rivian's vehicle pricing, or that even gave indications of profit margins, specific vehicle pricing, cash flow, returns on investment, how soon they'd be profitable, etc. There was a lot of information about addressable market size, average vehicle costs in the marketplace, potential revenue streams. If anything, Rivian gave the impression that service fees, financing, insurance, charging fees, etc were their keys to profitability, not profit on the original vehicle sale.

I have limited finance skills/training, no legal background at all, but I thought Rivian went out of their way to avoid the kind of info the suit appears to be covering. It was always hard to come up with a fundamentally sound forecast that justified the IPO pricing (other than comparisons to Tesla), and a lot of pre IPO articles stated the same.

I still want my R1T.

 

[nc10]

Paragraph 79 of the complaint quotes directly from two posts on this forum and the customer reaction.

Paragraph 83 seemed interesting to me. Rivian's attempt at damage control was actually highly effective, not "futile".

" 83. In a futile attempt at damage control, Rivian’s CEO issued a letter on March 3, 2022, apologizing to customers for breaking their trust and walking back the price increases by stating that the Company would honor original prices for preorders placed prior to the price increase announcement................... "

(Also, Go Illini!)

 

[IlliniRivian]

Paragraph 83 seemed interesting to me. Rivian's attempt at damage control was actually highly effective, not "futile".

" 83. In a futile attempt at damage control, Rivian’s CEO issued a letter on March 3, 2022, apologizing to customers for breaking their trust and walking back the price increases by stating that the Company would honor original prices for preorders placed prior to the price increase announcement................... "

(Also, Go Illini!)

Arguably, it was "futile" in relation to stopping the negative impact on the stock price, which has generally continued to fall. The lawsuit does not care that us, as consumers, are happy they walked back the price cut.

 

[nc10]

Arguably, it was "futile" in relation to stopping the negative impact on the stock price,

Ok. I see their point. But, hard to conclude it wouldn't have been much worse if Rivian hadn't sent the letter, though. Cancellations, ongoing complaints, etc.

 

[sub]

If they knew they needed to raise the price but held back pre-IPO, I agree that feels like a material omission. I would have been much less likely to have participated in the IPO if I had known that the advertised price was not sustainable.

 

[SANZC02]

" claimed the company misled investors in its initial public offering about how it had mispriced its electric vehicles, "

I don't remember anything in the IPO or roadshow presentation about Rivian's vehicle pricing, or that even gave indications of profit margins, specific vehicle pricing, cash flow, returns on investment, how soon they'd be profitable, etc. There was a lot of information about addressable market size, average vehicle costs in the marketplace, potential revenue streams. If anything, Rivian gave the impression that service fees, financing, insurance, charging fees, etc were their keys to profitability, not profit on the original vehicle sale.

I have limited finance skills/training, no legal background at all, but I thought Rivian went out of their way to avoid the kind of info the suit appears to be covering. It was always hard to come up with a fundamentally sound forecast that justified the IPO pricing (other than comparisons to Tesla), and a lot of pre IPO articles stated the same.

I still want my R1T.

You can read the final S1, all of these things are called out in the risk section including being able to deliver vehicles at a price or so equipped that would retain preorder holders.

We just live in a society where no one wants to take responsibility for any of the risk they take. Buying stock is risky, if you can’t live with a loss stay out of the market.

 

[cc84]

I have limited finance skills/training, no legal background at all.....

I still want my R1T.

I'm in the same position and I still want my R1T also. But,.......

To anyone:
Are the chances good that Rivian will survive, if they lose this lawsuit and the one with Laura Schwab?

What happens if Ford, Cox, and Amazon unload their shares?

 

[Inkedsphynx]

They won't unload their shares. Even if Rivian were to lose both lawsuits, the penalty would be a slap on the wrist compared to the assets Rivian has available to pay. Look at the Nikola settlement, it was an incredibly piddly amount if applied to a 50+B$ company.

 

[sub]

You can read the final S1, all of these things are called out in the risk section including being able to deliver vehicles at a price or so equipped that would retain preorder holders.

We just live in a society where no one wants to take responsibility for any of the risk they take. Buying stock is risky, if you can’t live with a loss stay out of the market.

A risk is something that might happen. It is not something that you know will happen. If before the IPO they had plans to raise the price shortly after the IPO, it was not accurate to just describe that as a risk of something that might happen.

 

[cc84]

You can read the final S1, all of these things are called out in the risk section including being able to deliver vehicles at a price or so equipped that would retain preorder holders.

You have a good point here. However, I would think that would only apply, if you didn't know in advance of the IPO, about needing to raise prices. Rivian's excuse will be that ramping up production, along with inflation caused the large increase, discovered after the IPO. It will need to be proven Rivian had knowledge prior to the IPO. That will be hard to prove, as well as it will be for Ms. Schwab, I suspect. Stay tuned.

We just live in a society where no one wants to take responsibility for any of the risk they take. Buying stock is risky, if you can’t live with a loss stay out of the market.

I agree with your statement. There are exceptions though, that cause your risk to be more, than what you view it to be. Part of that responsibility should be shared by the offending party.......Bernie Madoff comes to mind.

Sponsored